Washington, September 16, 2026: The ongoing US-Iran conflict has cost the US Department of Defense about $38 billion, according to a new assessment by the nonpartisan Congressional Budget Office (CBO).
The CBO said the costs could continue rising by around $2 billion to $3 billion every month, depending on the intensity of the fighting. If the conflict remains at lower levels of violence, monthly costs would be closer to $2 billion, while a renewed escalation could push the figure towards $3 billion.
CBO estimates $38 billion in military costs
The CBO’s assessment covers costs through August 1, 2026. The estimate largely reflects expenses related to replacing munitions, equipment losses, increased flying hours, fuel and other operational requirements.
The estimate is broadly in line with an earlier figure of about $37.5 billion cited by US Defence Secretary Pete Hegseth at a Senate hearing in July.
The CBO noted that its estimate does not include several potential future expenses, including certain costs associated with repairing damaged military facilities, diplomatic operations, foreign aid and long-term healthcare and compensation costs for military personnel.
Monthly costs could rise if fighting intensifies
According to the CBO, the monthly financial burden depends heavily on the level of military activity.
If the conflict remains relatively sporadic, similar to conditions seen during May and June, the additional monthly cost could be around $2 billion.
However, if fighting reaches the higher intensity recorded in July, the monthly cost could approach $3 billion.
US munitions stocks under pressure
The CBO assessment also highlighted pressure on US military inventories.
The agency said the conflict has resulted in a substantial drawdown of important munitions, including missile-defence interceptors. Replenishing some of these stocks could take at least five years, even if procurement rates are increased.
The report said the depletion could have implications for the US military’s ability to respond to another major conflict requiring large quantities of missile-defence and precision weapons.
Energy prices and inflation affected
The conflict has also had economic consequences beyond direct military spending.
Disruptions involving the Strait of Hormuz and regional energy infrastructure have contributed to higher energy prices. The CBO estimates that the conflict could add around 0.5 percentage points to personal-consumption inflation in the first quarter of 2027 compared with its pre-war forecast.
Higher inflation could also affect US borrowing costs and put additional pressure on federal finances.
Pentagon did not provide full data to CBO
The CBO said its assessment was based substantially on publicly available information because the Department of Defense did not respond to the agency’s requests for information. As a result, some elements of the cost estimate remain uncertain.
The CBO’s report was requested by Rep. Brendan Boyle, the top Democrat on the US House Budget Committee.
War costs add to wider fiscal pressure
The growing military expenditure comes as the United States faces broader fiscal pressures. Reuters reported that US public debt crossed $40 trillion in August 2026.
The CBO’s estimate therefore provides a snapshot of the direct financial burden of the conflict while leaving several longer-term and indirect costs outside the headline $38 billion figure.
The assessment is expected to fuel further debate in Washington over military spending, replenishment of weapons stockpiles and the economic consequences of the continuing conflict.
