US-Iran war costs reach $38 billion, CBO reports

The Congressional Budget Office (CBO) reports that the war involving the United States and Iran has cost approximately $38 billion through August 1. The nonpartisan analysis indicates that the conflict is expected to continue costing between $2 billion and $3 billion per month.

According to the CBO, these costs stem primarily from the need to replace munitions and equipment lost in combat, increased flight hours, and rising fuel costs. The report notes that replenishing depleted ammunition stocks could take at least five years. The findings align closely with previous testimony from Defense Secretary Pete Hegseth, who estimated the cost at $37.5 billion.

The CBO also projected that the war could contribute to inflation through the first quarter of 2027, potentially raising estimates by about 0.5 percentage points due to disruptions in oil and natural gas shipments through the Strait of Hormuz and maritime transport in the Red Sea. The current cost assessment does not include expenses related to military casualties, long-term medical care, or veteran disability compensation.