CBO: U.S. Combat Operations Against Iran Cost About $38.1 Billion Through Aug. 1

The Congressional Budget Office said Tuesday that U.S. combat operations against Iran had added about $38.1 billion in Pentagon costs through Aug. 1, offering Congress an independent estimate of a war bill that is still rising by roughly $2 billion to $3 billion a month depending on the pace of fighting. The estimate, in a Sept. 15 letter from CBO Director Phillip L. Swagel to Rep. Brendan F. Boyle, covers incremental Defense Department operational, logistical and sustainment costs for the campaign the agency calls Operation Epic Fury, which began Feb. 28.

The biggest drivers were replacing expended munitions, at $21.7 billion, and increased flying hours, at $10.4 billion. CBO also estimated $2.7 billion in increased fuel costs, $1.9 billion for equipment lost in battle and $1.5 billion in other operating costs. The operation’s most intense phase ran from Feb. 28 to April 8, CBO said, before continuing at a lower intensity. After further Iranian attacks, the president declared a ceasefire over on July 10.

CBO stressed that the $38.1 billion figure is not a full accounting of the war’s costs. It said the estimate excludes repairs and rebuilding of U.S. bases because it lacked sufficient data, and it did not assign financial costs to service members killed or injured or include long-term veterans’ health care or disability compensation. The office also warned that its estimates carry “considerable uncertainty” because the Defense Department did not respond to its requests for information, forcing CBO to rely on government databases and public reporting. “CBO estimates that as of August 1, 2026, the armed conflict with Iran has cost DoD approximately $38 billion,” the report said.

The new estimate lands in the middle of a live funding debate. The administration submitted an $87.6 billion supplemental request on June 24, including $67.1 billion for the Pentagon. CBO said about $42.3 billion of that Defense Department request appears to be directly related to the conflict, or roughly 10% more than CBO’s estimate through Aug. 1. Defense Secretary Pete Hegseth, meanwhile, told Congress on July 22 that combat operations had cost $37.5 billion. Looking ahead, CBO said if the conflict remains at the lower intensity seen in May and June, incremental Pentagon costs would run about $2 billion a month; if fighting returns to about the July level, the cost would be about $3 billion a month. CBO put July’s monthly operating cost at about $3 billion.

The budget effect is only part of the story, CBO said. The conflict is also pushing through to the wider economy mainly via higher energy prices, as reduced shipments through the Strait of Hormuz and disruptions in the Red Sea lift oil costs. CBO said Brent crude rose from $64 a barrel in the fourth quarter of 2025 to a peak of $103 in the second quarter of 2026. It projected Brent at $84 by the end of this year and $76 by the end of 2027. Relative to its February 2026 forecast, CBO estimated that by the first quarter of 2027 the conflict will raise the level of the personal consumption expenditures price index, a broad inflation gauge, by 0.6 percentage points and the core PCE index by 0.3 percentage points. It also said 3-month Treasury bill rates were nearly 0.2 percentage points higher in 2026 than it had projected before the conflict, though the inflation and interest-rate effects had modest, roughly offsetting effects on federal revenues and outlays.

CBO’s report also pointed to a longer-term strategic cost that is harder to capture in a single budget line: depleted U.S. missile-defense inventories. Since June 2025, the United States has probably used between one-half and two-thirds of its stocks of key interceptors, CBO said, including Patriot, THAAD, SM-3 and SM-6 systems. Replenishing those inventories would likely take at least five years, a warning that the fiscal toll of the conflict is arriving alongside pressure on weapons stockpiles that cannot be quickly rebuilt.