The United States’ conflict with Iran has already generated an estimated $38 billion Defense Department bill—and that total stops on August 1.
If operations continue at the relatively low intensity seen in May and June, another month would cost roughly $2 billion. If fighting returns to July’s intensity, the monthly cost would rise to about $3 billion and could climb higher if violence escalates, according to a new Congressional Budget Office assessment.
The nonpartisan agency’s estimate reaches beyond a single headline number. It describes a conflict consuming expensive munitions, increasing flight and fuel costs, pressuring missile inventories and contributing to higher prices for American households.
Where the $38 billion went
The largest component was replacing weapons used during the conflict. CBO estimated that expended munitions accounted for $21.7 billion through August 1: approximately $13.1 billion for missile-defense interceptors, $7.3 billion for land-attack cruise missiles and $1.2 billion for other munitions.
Increased military flying added an estimated $10.4 billion. That included roughly $4.6 billion for Air Force bombers and support aircraft, $3.4 billion for Air Force tactical aircraft and $2.4 billion for Navy aircraft operating from carriers and amphibious assault ships.
Higher fuel prices contributed another estimated $2.7 billion during fiscal 2026. The total also reflects other operational and logistical expenses and the cost of replacing equipment lost in battle.
Reuters reported that the estimate is close to the $37.5 billion Defense Secretary Pete Hegseth cited during a July Senate hearing.
The estimate leaves major costs outside the total
The $38 billion figure is not a final accounting. It excludes expenses borne by federal agencies outside the Defense Department and does not include ordinary military operating costs already built into the federal budget.
The Associated Press noted that the estimate also excludes costs connected to service members killed or wounded, along with future veterans’ health care and disability compensation. Reuters reported that it does not cover more recent strikes on commercial shipping and U.S. installations or the government’s borrowing costs.
CBO emphasized that its calculations carry “considerable uncertainty.” The agency relied on government databases and public reporting because the Defense Department did not respond to its requests for information.
A five-year missile-replacement problem
The report’s most consequential warning may concern time rather than money. The heavy use of missile-defense interceptors has left the United States with a reduced inventory that could limit its options during another major conflict.
CBO said rebuilding interceptor stocks would probably take at least five years even if production increased. Manufacturing expansion has historically moved slowly, with three to five years often passing between an order and delivery.
The Pentagon disputes the suggestion that it lacks adequate supplies. Chief spokesperson Sean Parnell told Reuters that the military has what it needs to act when directed. Still, Hegseth sought nearly $90 billion in emergency funding during his July testimony and warned lawmakers of critical shortfalls without additional money.
The economic effects extend beyond the Pentagon
CBO said the conflict’s main economic impact comes through reduced oil and natural-gas shipments through the Strait of Hormuz and disruptions in the Red Sea. Those constraints have increased global energy prices and raised the cost of producing and transporting other goods.
Compared with its February forecast, CBO now expects the conflict to raise the overall personal-consumption-expenditures price index by 0.6% in the first quarter of 2027 and the core index by 0.3%.
The administration requested $87.6 billion in supplemental funding in June, including $67.1 billion for the Defense Department. CBO calculated that $42.3 billion of the request appeared directly connected to the conflict—about 10% above its estimate of costs through August 1.
The meter is still running
The war began February 28 and has shifted between intense fighting and quieter periods, but it has not ended. That makes the $38 billion figure a checkpoint, not a ceiling.
At CBO’s projected pace, six additional months could add roughly $12 billion under lower-intensity conditions or $18 billion at July’s level. Any new escalation could push the total higher still.
For taxpayers, military planners and lawmakers debating emergency funding, the report makes the stakes unusually concrete: billions already spent, billions more potentially arriving each month, and some of the hardest-used defenses taking years to replace.
