CBO estimates US war with Iran has cost $38 billion, strained munitions stockpiles

The United States’ war with Iran has cost approximately $38 billion after more than six months of fighting and has placed significant pressure on US munitions inventories, according to a report by the nonpartisan Congressional Budget Office (CBO).

The CBO estimate, which covers spending through 1st August, projects that the conflict could add approximately $3 billion per month to US government costs if current operations continue.

The report also estimates that the economic effects of the conflict could increase US inflation by around 0.5 percentage points during the first three months of 2027, partly reflecting higher energy prices.

The $38 billion estimate is close to the $37.5 billion figure cited by Defence Secretary Pete Hegseth during a Senate hearing on 21st July.

According to the CBO, a substantial portion of the financial burden is associated with the rapid consumption of US munitions and the cost of replenishing military stockpiles.

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The agency estimated that rebuilding inventories to previous levels could take as long as five years, highlighting the longer-term implications of sustained weapons use during the conflict.

Reuters reported in August that the United States had consumed nearly all of its available stocks of certain long-range precision-guided missiles during the war, underscoring concerns about the pace at which some advanced munitions have been used.

The CBO report also said the Department of Defence did not cooperate with congressional financial auditors, according to the account of its findings. The White House and Defence Department did not immediately respond to requests for comment.

The $38 billion estimate does not include costs associated with more recent attacks on commercial shipping in the Strait of Hormuz or strikes on US military facilities in the region.

It also excludes the government’s borrowing costs associated with financing military operations. Including those expenses could increase the conflict’s long-term fiscal cost by tens of billions of dollars, according to the report.

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