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# Iran War’s Price Tag Reaches $38 Billion as Costs Could Rise by $3 Billion a Month
- URL: https://www.warfaredecoded.com/iran-wars-price-tag-reaches-38-billion-as-costs-could-rise-by-3-billion-a-month/
- Published: 2026-09-18T14:30:33.000Z
- Updated: 2026-09-18T14:30:32.000Z
- Author: Kevin Macmellon

U.S. military operation against Iran has cost the Department of Defense approximately **$38 billion through August 1, 2026**, according to a new analysis from the Congressional Budget Office (CBO). The agency estimates that continued combat could add **$2 billion to $3 billion per month**, depending on the intensity of fighting.

## CBO Puts Six-Month Cost at $38 Billion

The CBO's September 15 assessment covers the direct costs incurred by the Defense Department since the conflict began in February. The estimate includes replacement of expended munitions, equipment lost in combat, additional flying hours, other operations, and increased fuel costs.

The figure is broadly consistent with the **$37.5 billion** cost estimate Defense Secretary Pete Hegseth gave lawmakers in July.

## Monthly Costs Could Reach $3 Billion

The CBO estimates that the financial burden will depend heavily on the level of military activity. If fighting remains at relatively low levels similar to May and June, the Pentagon could spend about **$2 billion per additional month**. If combat returns to the intensity seen in July, monthly costs could reach about **$3 billion**, with even higher spending possible if the conflict escalates further.

That means another six months of operations at the higher estimated rate could add roughly **$18 billion** to the direct Pentagon cost, although the actual figure would depend on the intensity and duration of future operations.

![](https://storage.ghost.io/c/1e/44/1e448b0d-1e44-4bbb-bad8-c4da165a2995/content/images/2026/09/A-massive-column-of-smoke-rises-over-a-densely-populated-coastal-city-following-a-powerful-explosion.png)

A massive column of smoke rises over a densely populated coastal city following a powerful explosion

## Munitions Make Up a Major Share of the Cost

A significant portion of the spending is connected to the rapid use of precision weapons and missile-defense interceptors.

The CBO said the conflict has created an opportunity cost for the Pentagon because large numbers of missile-defense interceptors have been expended. The resulting reduction in inventories could persist for several years while the United States replenishes its stockpiles.

Reuters reported that the conflict has also strained U.S. munitions inventories, adding another challenge for defense planners as Washington considers requirements for other potential conflicts.

## Pentagon Data Limited the Estimate

The CBO's $38 billion figure comes with an important limitation: **the Defense Department did not provide the information requested by congressional budget analysts**.

As a result, CBO relied on government databases and publicly available information to estimate the Pentagon's costs. The agency said this creates considerable uncertainty around its estimate. The $38 billion figure also does not represent the full economic cost of the conflict.

![](https://storage.ghost.io/c/1e/44/1e448b0d-1e44-4bbb-bad8-c4da165a2995/content/images/2026/09/Large-smoke-plumes-rise-in-the-distance-as-traffic-moves-along-a-highway-in-Iran--with-Persian-and-English-road-signs-visible-in-the-foreground.png)

Large smoke plumes rise in the distance as traffic moves along a highway in Iran, with Persian and English road signs visible in the foreground

## Damage to U.S. Bases Not Included

The CBO estimate does not include the cost of damage to U.S. military installations resulting from Iranian attacks. It also excludes basic operating expenses that were already included in the federal budget.

Potential future expenses related to diplomatic operations, foreign assistance, and other federal agencies were also not included because CBO said they could not yet be reliably estimated.

## Strait of Hormuz Adds Economic Pressure

Beyond direct military spending, the conflict has affected global energy markets by disrupting oil and natural-gas shipments through the **Strait of Hormuz** and shipping through the Red Sea.

According to the CBO, higher energy prices are expected to increase inflation. The agency estimates that inflation in the first quarter of 2027 could be **0.5 percentage points higher** than it projected in February 2026 because of the conflict's economic effects.

The increase in energy costs can also feed into transportation and production expenses across the wider economy.

## U.S. Military Readiness Faces Additional Pressure

The financial burden is accompanied by pressure on military inventories. CBO specifically highlighted the depletion of missile-defense interceptors as an opportunity cost that could leave the United States with reduced inventories for several years.

The agency noted that such shortages could become particularly significant if the United States faced another conflict involving an adversary with large ballistic- and cruise-missile arsenals.

![](https://storage.ghost.io/c/1e/44/1e448b0d-1e44-4bbb-bad8-c4da165a2995/content/images/2026/09/A-tactical-map-illustrates-air-and-naval-activity-around-the-Persian-Gulf-and-Strait-of-Hormuz--highlighting-aircraft--warships--routes-and-strategic-positions.png)

A tactical map illustrates air and naval activity around the Persian Gulf and Strait of Hormuz, highlighting aircraft, warships, routes and strategic positions

## Costs Could Continue Rising

The **$38 billion figure is therefore not a final price tag**. It represents estimated Defense Department costs through August 1, while combat operations have continued since then.

Under the CBO's scenarios, another month could cost roughly $2 billion at lower levels of violence or around $3 billion at the intensity seen in July. Costs could be higher if military activity escalates.

The CBO also emphasized that its different estimates—military spending, economic effects, and potential future costs—use different methods and time periods and **should not simply be added together**.

Author: Kevin Macmellon