The United States war on Iran has cost the country $38bn so far, the Congressional Budget Office (CBO) said this week, adding that an estimated $3bn will be added every month if the conflict continues, placing strain on the country’s finances and economy. The report, which was released on Tuesday, revealed that the protracted war is straining US munitions stockpiles and fuelling inflation as the Strait of Hormuz, a global oil export chokepoint, remains under Iranian blockade. The shortage of munitions poses a major security risk in the event of a new conflict.
The findings of the inquiry will likely add fuel to the wave of criticism about the six-month-old war, which the US launched alongside Israel on February 28, and which US President Donald Trump claimed would only last a few weeks. The conflict has rattled the global energy market and contributed to rising prices as US voters express concern about the cost of living in the run-up to the November US midterm elections. The CBO’s report also comes on Monday’s report from the Pentagon’s official watchdog about the losses the US has incurred throughout the war – including the first admission by the body of low weapons stockpiles.
Here’s what we know about how the war continues to affect domestic US politics, as well as its economy. The $38bn cost cited is close to the $37.5bn shared by Defense Secretary Pete Hegseth at a Senate hearing on July 21. It does not include the costs of recent US strikes on vessels in the Strait of Hormuz or of Iranian attacks on US military installations in the region.
Nor does it count borrowing expenses, which could add tens of billions of dollars to the total cost. Dwindling weapons stockpiles have made up the bulk of the costs – $25bn of weapons have been used up so far – with the budget office estimating it could take five years to restore expended US stockpiles. The conflict is likely to fuel inflation, which is expected to rise by 0.5 percentage points in the first three months of 2027, said the Congress’s nonpartisan bookkeeper.
The rising cost of the war will also act as a drag on US fiscal health as the country’s national debt topped a record $40 trillion last month. The top Democrat on the US House of Representatives Budget Committee, Brendan Boyle of Pennsylvania, requested the inquiry into the US’s war expenditure. The Department of Defense did not cooperate with the inquiry, he said.
On Monday, a separate report by the Pentagon’s Office of the Inspector General also outlined US losses in the war – the first such public acknowledgement by US authorities. That report found that the war had cost $33bn between February 28 and June 30 – with an estimated $22bn spent on expended munitions. In a turnabout from the Trump administration’s repeated assurances that US stockpiles of weapons remain healthy, the Pentagon admitted it is indeed running out of munitions – particularly defensive systems – and is facing “bottlenecks” in supply chains.
Extract — continue reading at the source.
