Nonpartisan CBO report details Pentagon war costs and warns of rising inflation tied to the six-month conflict.
WASHINGTON — The Congressional Budget Office reported on Tuesday, September 15, 2026, that U.S. combat operations against Iran have cost the Department of Defense approximately $38 billion as of August 1, with the agency projecting additional monthly costs of $2 billion to $3 billion if the conflict continues, according to the CBO report titled "Estimating the Cost of Combat Operations Against Iran."
Breakdown of War Costs
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The $38 billion figure includes $21.7 billion for replacing expended munitions — comprising $13.1 billion for missile defense interceptors and $7.3 billion for cruise missiles — along with $10.4 billion tied to increased flying hours, $2.7 billion in higher fuel costs, $1.9 billion in equipment lost in combat, and $1.5 billion in other operational costs, according to the CBO and Breaking Defense's summary of the report. CBO said costs would run about $2 billion a month if fighting stays at the lower intensity seen in May and June 2026, or roughly $3 billion a month if it matches July's higher intensity, with the possibility of further increases if the conflict escalates. The report was prepared at the request of Rep. Brendan Boyle, ranking member of the House Budget Committee.
Inflation and Munitions Strain
CBO found the war responsible for more than one-third of this year's U.S. inflation increase and over 40% of inflation during the second quarter of 2026, driven largely by disrupted oil and gas shipments through the Strait of Hormuz and the Red Sea, according to NBC News' reporting on the report. The agency projects the war will add roughly 0.5 percentage point to inflation in the first quarter of 2027, with borrowing costs for Americans expected to rise as a result. Separately, the report and coverage by The New York Times indicate it will take at least five years for the Pentagon to replenish munitions stockpiles depleted during the fighting.
Reuters described the conflict as the "six-month-old U.S. war against Iran," noting the Trump administration is searching for ways to end the fighting and reopen the Strait of Hormuz. Politico reported the $38.1 billion figure represents more than half of the administration's total war spending request to Congress, arriving ahead of the midterm elections. The CBO figure excludes spending by other federal agencies, routine baseline military costs, and long-term veterans' care obligations.
