CBO: Iran War Costs Pentagon $38.1 Billion, Depletes Missile Defense Stockpiles
On Tuesday, the Congressional Budget Office revealed that the Pentagon has incurred costs of $38.1 billion due to the U.S. conflict with Iran, as of August 1. The primary expense stems from munitions replacement, totaling $21.7 billion, which includes $13.1 billion allocated for missile defense interceptors. Additional costs include $10.4 billion from increased flying hours and $2.7 billion due to rising fuel prices. Equipment losses in combat, such as a THAAD radar valued at approximately $500 million, contributed $1.9 billion. The CBO highlighted that since Iran began its assaults on Israel in June 2025, America's interceptor stock has diminished by 50% to 66%. A prolonged low-intensity conflict could result in monthly expenses between $2 billion and $3 billion, while diesel prices have surged to an unprecedented $6.27 per gallon.
Key facts
- The Congressional Budget Office estimated the U.S. conflict with Iran has cost the Pentagon $38.1 billion through August 1
- Munitions replacement is the largest cost driver at $21.7 billion, including $13.1 billion for missile defense interceptors
- Patriot, THAAD, Standard Missile-3, and Standard Missile-6 interceptor stocks have been drawn down by half to two-thirds since June 2025
- Rebuilding depleted missile defense stocks could take at least five years even with increased production
- Operation Epic Fury ran from February 28 to a ceasefire on April 8
- July alone cost approximately $3 billion after President Donald Trump declared the April ceasefire void
- The war is projected to leave year-over-year PCE inflation 0.5 percentage points higher by the first quarter of 2027
- The national diesel average reached a record $6.27 a gallon
Entities
Artists
- Donald Trump
- Brendan Boyle
- Scott Bessent
- Pete Hegseth
Institutions
- Congressional Budget Office
- Pentagon
- House Budget Committee
- Senate Armed Services Committee
- Treasury Department
- Congress
Locations
- Iran
- United States
- Israel
- China
- Taiwan
- Strait of Hormuz
- Pennsylvania
- Russia
Sources
- Quartz —