U.S. Navy sailors service a fighter jet on the flight deck of the USS George Washington in the Arabian Sea on September 11, 2026.
Ed Ou | Reuters
The U.S.-Iran war will cost the Pentagon an estimated $38.1 billion through Aug. 1, and each additional month of fighting could cost an additional $2 billion to $3 billion, according to a report released Tuesday by the nonpartisan Congressional Budget Office.
More than half of the costs came from replacing missiles and other munitions used during the conflict. CBO estimates that increased flight hours cost an additional $10.4 billion, and higher fuel prices added $2.7 billion. Wars have caused fuel prices to rise around the world since President Donald Trump imposed them on February 28th.
The war has also consumed two-thirds of the country’s missile defense interceptors since June 2025, largely as a result of the US helping to defend Israel from Iranian attack, and the US inventory has remained reduced for several years, the CBO warned.
“Rebuilding the Department of Defense’s interceptor missile inventory will likely take at least five years, even with increased production,” the CBO said in a report requested by Rep. Brendan Boyle (Pennsylvania). He is the top Democrat on the House Budget Committee.
CBO’s estimates are based on the first comprehensive accounting of war costs and military casualties released late Monday by the Pentagon’s inspector general. The two accounting treatments reached similar conclusions.
The release of the new calculations could ignite debate over whether the cost of a war that President Trump initially claimed would last only a few weeks was worth it. Democrats are campaigning against the war ahead of the Nov. 3 U.S. presidential election, with President Trump pointing to rising fuel, food and other conflict-related costs in an effort to stop Iran from developing nuclear weapons.
Risk of missile shortage
The CBO said missile shortages could be “particularly problematic” in conflicts with adversaries with large arsenals of ballistic and cruise missiles, citing in particular the potential for conflict over China and Taiwan.
The war also increased consumer prices by reducing oil and gas shipments through the Strait of Hormuz and disrupting Red Sea shipping.
The CBO estimated that the war would increase year-over-year inflation by 0.5 percentage points by the first quarter of 2027, as measured by the Personal Consumption Expenditures Price Index, the Federal Reserve’s preferred inflation measure. Core PCE inflation is expected to rise by 0.3 percentage point as energy costs spill over into the supply chain, the CBO said.
“Prices for nearly all items reflect shipping charges,” the CBO said.
By early 2027, gasoline and other fuels will account for about 40% of the war’s impact on consumer prices, according to the CBO.
U.S. crude rose above $106 on Tuesday, while Brent rose above $109 after Saudi Arabia reportedly canceled shipments following the closure of a major pipeline that bypasses the Strait of Hormuz. Meanwhile, the national average price for regular gasoline was about $4.33 per gallon, up about 18 cents from last week and about $1.15 from a year ago, according to AAA.
CBO and Department of Defense calculate the cost of war
The Pentagon estimated the cost of the war to be $33.4 billion as of June 29. This includes $7.4 billion in incremental operating costs, $22.3 billion in replacement of depleted munitions, and $3.7 billion in equipment losses.
The pace of weapons use has created a “strategic inventory shortage,” a Pentagon watchdog said. Shortages of solid rocket motors, explosives, propellants, and skilled labor complicate efforts to replenish U.S. stockpiles.
A Pentagon report on Monday said the Iranian attack also damaged or destroyed “hundreds of buildings and structures” at bases in eight Middle Eastern countries. Dozens of aircraft were damaged or destroyed, including four F-15E fighters, seven F-35A and KC-135 tanker planes, seven helicopters, and more than 30 unmanned aerial vehicles.
According to the U.S. Air Force, the F-35A costs as much as $92 million apiece, and the F-15E, which is no longer in production, cost $31.1 million in 1998.
A Pentagon report notes that the State Department spent $79.2 million on local population evacuations and other emergency costs during the ban on war. Additionally, the damage to diplomatic facilities in Iraq, Kuwait, Saudi Arabia, and the United Arab Emirates is estimated at $184 million. The Pentagon did not provide an estimate of funding sources or plans for rebuilding the damaged military bases.
