Combat operations during the war with Iran cost approximately $38 billion as of August 1, 2026, according to a new analysis from the Congressional Budget Office.
That estimate reflects the cost of munitions used in combat ($21.7 billion) and equipment lost in battle ($1.9 billion), as well as the cost of increased flying hours ($10.4 billion) and jet fuel ($2.7 billion). It does not, however, include activities that were budgeted before the war, such as basic operating costs for the U.S. military, nor does it include second-order effects, such as how the increase in fuel prices raises costs for the federal government. It also ignores the cost of rebuilding U.S. bases in the Middle East that were damaged by Iranian missile attacks.
Costs are continuing to rise, the CBO said, but the cost of ongoing operations depends on the level of violence. As a rough estimate, the CBO said operations during periods with relatively low levels of violence, as in May and June, cost about $2 billion per month. As violence escalates and the pace of operations picks up, as in July, the cost rises to about $3 billion per month.
The war with Iran also has broader economic costs, including higher interest rates and inflation. The CBO estimates that the inflation rate, as measured by the price index for personal consumption expenditures, will be 0.5 percentage points higher at the beginning of 2027 than projections indicated before the start of the war, due largely to higher energy prices.
The CBO noted that it developed its cost estimate using government databases and publicly available information, because the Department of Defense “did not respond to CBO's requests for information.” As a result, the CBO analysis is “subject to considerable uncertainty.” Nevertheless, the CBO’s cost estimate comes close to the $37.5 billion estimate provided by Defense Secretary Pete Hegseth in congressional testimony in July.
Pentagon details damages: The Defense Department’s inspector general released a report Monday that provides details on U.S. military losses in the Middle East, including damages inflicted by Iran on U.S. bases in the region, through June 30.
During that time, “Iranian strikes damaged and destroyed hundreds of buildings and structures at U.S. bases in Kuwait, Bahrain, Qatar, UAE, Saudi Arabia, Iraq, Oman, and Jordan,” the report says. “In addition, dozens of U.S. aircraft were destroyed or damaged during [Operation Epic Fury].”
The report also says that the war has resulted in “strategic inventory shortfalls” for some types of munitions, and exposed “industrial base bottlenecks” that are slowing the resupply of munitions. The bottlenecks include the production of rocket motors, the availability of explosives and propellants, and a shortage of skilled labor.
In terms of overall cost, the report says the Pentagon’s chief financial officer estimated that the war had cost $33.4 billion through mid-June.