The Congressional Budget Office reported that the U.S. war against Iran has cost the Department of Defense more than $38 billion through August 1, 2026, with monthly costs expected to rise to $2 billion or more. The conflict is projected to increase inflation by 0.5 percentage points in 2027, driven by disruptions in oil and gas shipments through key straits.
The CBO estimate, based on replacement of munitions and equipment lost in battle, aligns with Defense Secretary Pete Hegseth's earlier estimate of $37.5 billion. The report highlights strategic inventory shortfalls, with the U.S. military having used half or more of its antimissile interceptors in under a year. The shortfall could worsen if a conflict with a major power like China emerges.
The war's financial burden is expected to impact U.S. taxpayers and inflation, with the CBO noting that the costs do not include repairs to damaged facilities, diplomatic operations, or long-term veterans' healthcare. The conflict, now in its seventh month, continues to strain resources and raise concerns about the sustainability of military spending.