US war with Iran costs reach $38bn, set to rise by $3bn monthly

The nonpartisan Congressional Budget Office said on Tuesday that the ongoing US war with Iran, now in its sixth month, has cost $38 billion so far, with expenses projected to increase by about $3 billion each month. The Trump administration is currently exploring ways to end the conflict and reopen the Strait of Hormuz.

The office’s calculations, which cover spending up to August 1, indicate that the war could push up inflation by around 0.5% during the first three months of 2027.

Rising war costs have depleted US ammunition stockpiles and driven up energy prices, raising concerns about America’s ability to respond to other potential conflicts as federal budget pressures mount.

The CBO’s estimate is close to the $37.5 billion figure cited by Defense Secretary Pete Hegseth during a Senate hearing on July 21.

The office noted that most of the war’s costs stem from the rapid depletion of munitions, estimating that it could take five years to replenish US stockpiles. Reuters reported in August that the US had used “almost all” of its long-range precision missiles during the conflict.

The CBO also said the Department of Defense had not cooperated with congressional financial auditors.

White House spokesperson Anna Kelly, meanwhile, described President Donald Trump’s strikes on Iran as “decisive action” to prevent Tehran from harming US personnel or interests. She said the US military has “more than enough” munitions and reserves to achieve and exceed the president’s strategic objectives.

Sean Parnell, chief spokesperson for the Department of Defense (Pentagon), also questioned the report’s findings on ammunition shortages, saying the US has everything needed to strike at a time and place of the president’s choosing.

The investigation was conducted at the request of Brendan Boyle, Democratic leader of the House Budget Committee from Pennsylvania, who said the war has cost American taxpayers tens of billions of dollars in addition to the human toll.

Eighteen US service members have been killed in the war with Iran.

The CBO’s estimates do not include the costs of the most recent strikes on commercial vessels in the Strait of Hormuz or attacks on US military facilities in the region, nor do they account for borrowing expenses tied to war funding, which could add tens of billions of dollars to the total cost.

Impact on military readiness

The CBO concluded that the war could have far-reaching effects on US defense posture and the domestic economy, noting that shortages of critical munitions, including interceptor missiles, may limit the Department of Defense’s ability to respond if another major conflict arises, such as a potential confrontation between China and Taiwan.

During the July Senate hearing, Hegseth called for nearly $90 billion in emergency funding to replenish munitions stockpiles, warning of a severe shortfall without these funds.

The Pentagon’s inspector general reported that Iran has damaged or destroyed hundreds of buildings at US bases in the Middle East, as well as aircraft including fighters, refueling planes, and drones.

Attacks in the Strait of Hormuz—which before the war carried about 20% of global oil supplies—and strikes on energy facilities in neighboring Gulf states have also caused a sharp rise in energy prices for consumers and producers worldwide.

The rising cost of the war comes as total US public debt surpassed $40 trillion in August.

According to Reuters, the eight-year US war in Iraq cost about $2 trillion, while the two-decade war in Afghanistan reached $2.3 trillion, based on data from Brown University’s Costs of War project.