Pentagon Puts Iran War Cost at $45.1 Billion, Topping CBO Projection

The Pentagon has informed Congress that the United States' military engagement with Iran has cost $45.1 billion, a figure that exceeds earlier projections and reflects both combat expenditure and supplementary fuel needs.

Lawmakers were told that expenses had reached $43.6 billion as of September 3, with an additional $1.5 billion set aside for extra fuel requirements. The accounting does not cover installation repairs or broader operational costs, suggesting the full financial burden may be higher still.

The latest figure surpasses the $38 billion estimate published by the Congressional Budget Office, which assessed costs through August 1. It also exceeds the $37.5 billion bill the Pentagon cited in July.

CBO's assessment

In a report dated September 15, the CBO estimated that the conflict had cost the Department of Defense roughly $38 billion in operational, logistical and sustainment expenses as of August 1. That total included replacing munitions and equipment lost in battle, increased flying hours, other operations and higher fuel costs.

The estimate reflected that the initial intense phase of the conflict lasted just over a month, with less intense combat operations still ongoing, and that relatively few US forces have been involved compared with the far larger and longer operations in Iraq and Afghanistan.

The CBO's figure excluded costs borne by other parts of the federal government, such as higher fuel costs for the Postal Service, as well as expenses already accounted for in the federal budget, including the basic operating costs of the forces involved.

The office projected that costs will keep rising — slowly if violence remains low and sporadic, as it did in May and June, and rapidly if the conflict escalates, as it did in July. It estimated the war will continue to cost approximately $2 billion to $3 billion per month beyond August 1, with monthly costs potentially higher if violence intensifies.

Economic fallout

The CBO also told Congress that the conflict is expected to push inflation higher in the first quarter of 2027, raising costs at a time when Americans are increasingly concerned about the economy.

The main economic impact, the office said, stems from inflationary pressures caused by reduced shipments of oil and natural gas through the Strait of Hormuz and disruptions to shipping through the Red Sea. Those reductions have driven energy prices up globally, which the CBO expects to place upward pressure on consumer prices.

As a result, year-over-year inflation in the personal consumption expenditures price index for the first quarter of 2027 is now estimated to be 0.5 percentage points higher than the agency projected in February 2026, while core PCE inflation is estimated to be 0.3 percentage points higher.

The CBO further estimated that higher inflation attributable to the conflict will lift interest rates on Treasury securities, with rates on 3-month Treasury bills nearly 0.2 percentage points higher in 2026 than previously projected.