As hostilities in Iran continue, the Congressional Budget Office has a new cost estimate for the war thus far: $38 billion.
In addition to the $38 billion already spent, the CBO report published Tuesday estimates the war will cost an additional $2 billion to $3 billion per month beginning August 1 — and it could increase with more direct hostilities, such as exchanges of fire or damage to military bases.
“CBO’s estimate does not include costs borne by other parts of the federal government, such as the increased cost of fuel used by the Postal Service,” the report says. “Nor does it include costs already accounted for in the federal budget, such as the basic operating costs of the military forces involved in the conflict.”
Instead, the price tag is driven largely by the cost of munitions, and the CBO estimate is almost certainly an undercount. The lead inspector general for “Operation Epic Fury” issued a report to Congress on Monday that estimated the cost of the war to be $33.4 billion through June 30, with $22.3 billion for used munitions alone.
“The munitions expenditure in OEF has resulted in strategic inventory shortfalls and revealed industrial base bottlenecks for munitions resupply,” that report said.
Neither figure fully captures the real cost of the war, however.
The CBO estimate is simply putting a federal budgetary cost on the military operation. It does not attempt to put a dollar figure on the broader economic effects, like the costs of increased gas nationally or the human costs of war.
At least 18 U.S. service members have been killed and more than 800 injured since the war began in February. Unofficial estimates also peg the casualties in Iran, Lebanon and other Gulf states at between 9,000 and 18,000 people.
The report does note that, as a result of the war, higher energy prices could impact inflation heading into 2027, with the CBO projecting a 0.5 percent hike in interest rates in the first quarter of the year. Higher interest rates will raise borrowing costs and cool the economy, with the intention of cooling inflation.
The report estimates that, because of higher energy costs from the war, inflation increased 2.3% — to 5.3% — in the second quarter of 2026.
“Higher interest rates and higher inflation would increase net outlays for interest and outlays for mandatory spending programs, and CBO’s baseline projections of discretionary spending would increase if wages and prices in the economy were higher,” the report says.
While the report details how higher gas prices have contributed to increased costs for the military, their projections for oil costs may also be overly optimistic. “In CBO’s updated projections of crude oil prices (which reflect information through August 17, 2026), the price of Brent crude falls to $84 a barrel by the end of 2026 and $76 a barrel by the end of 2027,” the report says.
Meanwhile, Brent crude is currently trading at over $103 a barrel.
“The price of Brent crude is now expected to be 41 percent higher this year than the agency estimated in its February 2026 economic forecast, with that gap shrinking to 16 percent by the end of 2027,” the CBO estimates. “In addition, the costs of refining petroleum have increased, further boosting prices of gasoline, diesel fuel, and jet fuel.”
The war is also exacting a less immediate but potentially consequential cost on the military in the form of a long-term problem: depleted munitions stockpiles.
The report notes that rebuilding those stockpiles could take five years or longer, and as a consequence of the low munitions, the military’s capacity to engage in another major conflict has deteriorated.
The Defense Department did not respond to the budget office’s request for information.
The request to CBO was led by the top Democrat on the House Budget Committee, Rep. Brendan Boyle of Pennsylvania.
“Donald Trump’s disastrous war in Iran has already taken the lives of brave American servicemembers and left others wounded,” Boyle said. “Beyond that human toll, this nonpartisan CBO report makes clear that the war has also cost American taxpayers tens of billions of dollars and counting, while continuing to drive up costs.”
“Donald Trump and Republicans have spent years telling Americans that we cannot afford to help families here at home, but apparently they can find tens of billions of dollars, and potentially much more, for a reckless war that is leaving Americans to pay the price,” he added.
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