The US war with Iran has cost the Department of Defense approximately $38 billion as of August 1, 2026, with the expense expected to rise by another $2 billion to $3 billion every month while the conflict continues, depending on the intensity of military operations, according to an assessment released by the nonpartisan Congressional Budget Office (CBO). The estimate covers the direct costs of the conflict, including replacing munitions and equipment used or lost during combat, increased military flying hours, fuel and other operational expenses. The CBO analysis was prepared after a request from Rep. Brendan Boyle, the top Democrat on the House Budget Committee. The estimate is broadly in line with an earlier assessment by Defense Secretary Pete Hegseth, who told senators in July that the conflict had already cost about $37.5 billion.

The largest component of the cost has been the replacement of munitions expended during the conflict. The CBO estimated that replacing those weapons would cost about $21.7 billion, including approximately $13.1 billion for missile interceptors, $7.3 billion for land-attack cruise missiles and $1.2 billion for other munitions. Other major costs include about $10.4 billion in increased flying hours, $2.7 billion in additional fuel expenses, $1.9 billion for equipment lost in battle and roughly $1.5 billion in other operational costs. The CBO said the figures represent the direct financial impact on the Defense Department and do not capture every expense associated with the conflict.

The report also highlighted the effect of the war on US military inventories. The heavy use of missile-defence interceptors has reduced available stockpiles, with the CBO estimating that rebuilding depleted inventories could take five years or longer. The agency said the conflict has created a significant opportunity cost because weapons used in the war are no longer immediately available for other contingencies. The assessment also noted that the Defense Department did not provide information requested by the CBO, making it more difficult to determine the conflict's full financial impact. The Pentagon has maintained that the United States retains sufficient military capabilities, while the CBO's assessment points to substantial depletion in some categories of munitions.

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Beyond military spending, the conflict is expected to continue affecting the US economy through higher energy prices and inflation. The CBO estimated that inflation in the first quarter of 2027 could be about 0.5 percentage points higher than it had projected before the war. The agency attributed much of the additional pressure to disruptions in oil and natural-gas shipments through the Strait of Hormuz and shipping disruptions affecting the Red Sea. The conflict has therefore created economic effects beyond the Pentagon's direct expenditures, with higher energy costs potentially feeding into prices more broadly. The CBO also said higher inflation could contribute to increased interest rates on Treasury securities.

The $38 billion estimate also does not represent the full eventual cost of the conflict. The CBO figure excludes certain expenses, including some costs associated with repairing damaged US facilities, as well as longer-term expenses related to military personnel killed or injured during the fighting, veterans' healthcare and disability compensation. It also does not include some costs already covered by existing military budgets. The White House has separately sought supplemental funding for the conflict and military needs, but Congress had not approved the request described in the supplied material. With fighting continuing, the CBO estimates that another $2 billion to $3 billion could be added to the Defense Department's costs each month, with the figure potentially increasing if the intensity of the conflict rises.

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