The cost of the war with Iran as of August 1, 2026, for the United States Department of Defense has reached approximately $38 billion. This figure was announced by the Congressional Budget Office (CBO) and reflects the costs arising from a war that began with U.S. and Israeli attacks on Iran in late February.
Rising Costs as Conflicts Continue
The CBO has predicted that as the conflicts continue, the monthly costs of the war could range from $2 to $3 billion or even more. These costs include replacing expended munitions, equipment lost in battle, and increased fuel costs for military forces.
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In July, Pete Hegseth, as the U.S. Secretary of Defense, estimated the cost of the war with Iran at $37.5 billion. However, the CBO now estimates that the main economic effects of this conflict will be inflationary pressures resulting from disruptions in oil and natural gas supply.
Economic Consequences and Inflation
In response to this war, Iran has blocked the Strait of Hormuz, which is a vital waterway for energy transportation, leading to increased costs in global markets. According to CBO forecasts, the inflation rate in the first quarter of next year will be 0.5 percent higher than what was predicted in February. The CBO believes that the core inflation rate, which excludes fluctuations in food and energy prices, is also likely to be 0.3 percent higher than previous forecasts.
This report also notes that rising inflation rates will lead to increased interest rates on Treasury bonds. Therefore, financing costs for the United States government will also be affected, potentially leading to greater volatility in financial markets.
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