Iran war has cost US military $38bn, says Budget Office

By the Editorial Team · Thursday, September 17, 2026

The U.S. military has spent about $38 billion on the conflict with Iran as of August 1, with munitions replacement and operational costs driving most of the expenses. This spending has significantly depleted missile defense interceptors and contributed to higher U.S. inflation due to disruptions in global oil markets caused by Iran's blockade of the Strait of Hormuz.

The ongoing conflict between the United States and Iran has cost the U.S. military approximately $38 billion as of August 1, according to a report released Tuesday by the nonpartisan Congressional Budget Office (CBO). The war, which escalated following strikes involving Israel targeting Iranian assets in late February, has continued to incur significant expenditures for the Department of Defense.

The CBO noted that monthly costs associated with the conflict could range from $2 billion to $3 billion or more, contingent on the intensity of the fighting. The bulk of the expenses stem from replenishing expended munitions and replacing equipment lost in combat, alongside increased fuel consumption and other operational factors. Specifically, the replacement of munitions through August 1 amounted to an estimated $21.7 billion, marking it as the largest single cost driver for the military during the conflict.

The report highlighted a critical "opportunity cost" tied to the extensive use of missile defense interceptors. U.S. officials have likely depleted between half and two-thirds of their interceptor inventory since June 2025, reducing available stockpiles for several years. This reduction poses strategic challenges for defense capabilities moving forward, the CBO warned.

This fiscal assessment was undertaken at the request of Brendan Boyle, the senior Democrat on the House Budget Committee, along with other Democratic members of Congress. Defense Secretary Pete Hegseth had previously estimated the cost of the war at $37.5 billion in July, a figure now corroborated and slightly surpassed by the CBO report.

Beyond direct military expenditures, the report identified broader economic consequences tied to the conflict, particularly inflationary pressures emanating from disruptions in oil and gas markets. Iran's retaliation by blockading the Strait of Hormuz, a key maritime chokepoint responsible for a substantial share of global oil shipments, contributed to rising energy prices. The CBO projects that inflation in the United States in the first quarter of 2027 will be 0.5 percentage points higher than forecasts made earlier in the year, based on the personal consumption expenditures price index. Moreover, core inflation, which excludes volatile food and energy prices, is expected to be 0.3 percentage points above previous projections. These inflationary pressures are also likely to result in higher interest rates on U.S. Treasury securities.

In a separate development, efforts to enact comprehensive cryptocurrency legislation in the U.S. Congress stalled on Tuesday. The Digital Asset Market Clarity Act failed to advance in the Senate after falling short of the 60 votes needed to proceed to debate. Key points of contention included regulatory oversight, banking provisions, ethical safeguards, and how to address President Donald Trump’s extensive cryptocurrency holdings. Senator Elizabeth Warren, the senior Democrat on the Senate Banking Committee, criticized the bill, cautioning that it posed significant risks to families, national security, and the broader economy.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.