Iran war costs $38 billion so far, could rise by up to $3 billion per month: US budget office

The US Congressional Budget Office (CBO) estimated on Tuesday that America's war against Iran has cost the Department of Defense approximately $38.1 billion as of Aug. 1, with further months of conflict likely to add $2 billion to $3 billion each, depending on the intensity of hostilities.

In a letter to House Budget Committee Ranking Member Brendan Boyle, CBO Director Phillip Swagel said the figure covers the replacement of expended munitions and lost equipment, increased flying hours, fuel costs, and other operations tied to Operation Epic Fury, which began Feb. 28 with US-Israeli strikes on Iran.

Replacing munitions accounted for the largest share, $21.7 billion, including $13.1 billion for missile defense interceptors, the letter said. If hostilities stayed as low as in May and June, an extra month would cost $2 billion, but that figure would rise to $3 billion at July's intensity levels, it added.

The conflict has pushed up global oil and fuel prices due to disruptions in the Strait of Hormuz, contributing to higher inflation and interest rate projections through 2027.

The CBO's estimate is roughly 10% below the Administration's supplemental funding request of $42.3 billion for directly related costs and below Defense Secretary Pete Hegseth's July estimate of $37.5 billion through September, the letter said, citing differing methods and a lack of complete data from the Pentagon.

The US and Israel launched large-scale attacks against Iran on Feb. 28, targeting government buildings, military sites, missile infrastructure, and air defenses. Iran responded with missile and drone attacks against Israel and US bases across the region.

The war has since expanded in the region, while diplomatic efforts have sought to end the hostilities.