By Anjali Sharma
WASHINGTON – The US Congressional Budget Office on Sunday said that continued US-Iran fighting could add $2 billion to $3 billion a month, while heavy use of missile-defence interceptors could leave US inventories depleted for years.
According to a Pentagon assessment provided to Congress, the Iran war would cost $45.1b but even that figure leaves out some of the financial damage from the conflict.
Media reported that the Pentagon put war-related costs through September 3 at $43.6 billion.
It added that extra $1.5 billion was attributed to fuel expenditure, taking the overall estimate to $45.1 billion.
Media reports discussed the $45.1-billion Pentagon figure on air.
According to the report, the calculation does not include the cost of repairing damaged US military bases and buildings.
Congress was also not given a detailed assessment of indirect military-operation costs.
The latest figure is above the Pentagon estimate of $37.5 billion in July.
It also surpasses the Congressional Budget Office’s separate calculation of about $38 billion through August 1.
The CBO’s September 15 assessment offers a wider look at where the money is going and how quickly the bill could grow.
The non-partisan congressional agency estimated that the Department of Defense had incurred approximately $38 billion in operational, logistical and sustainment costs as of August 1.
The calculation covers the replacement of munitions fired during the conflict and equipment lost in battle.
It also accounts for increased flying hours, other military operations, and additional fuel expenditure.
The CBO cautioned that there was “considerable uncertainty” around its estimate.
The agency relied on government databases and public reports because the Department of Defense did not respond to its requests for information.
It said that how much more the conflict costs will depend heavily on the intensity of fighting.
Another month at the relatively low levels of violence seen in May and June would add about $2 billion.
The CBO estimated a return to July’s intensity would push the monthly cost to $3 billion.
“Monthly costs could be higher still if the violence escalated further,” the agency said.
Money is only part of the military equation, it stated.
The CBO identified the heavy use of missile-defence interceptors as the principal opportunity cost for the Pentagon.
It said the expenditure would leave the United States with reduced interceptor inventories for several years.
The budget office said that shortage could become particularly problematic in another conflict involving an adversary possessing large numbers of ballistic and cruise missiles.
The Trump administration had sought $87.6 billion in supplemental appropriations in June.
According to the CBO, of that, $67.1 billion was requested for the Defense Department, and $42.3 billion appeared to be directly related to the Iran conflict.
The economic cost extends beyond Pentagon spending.
According to the CBO, disruptions to oil and natural-gas shipments through the Strait of Hormuz and to shipping through the Red Sea have driven up global energy prices.
It noted that those pressures extend beyond crude oil.
The agency said disruption to refining had also increased prices of gasoline, diesel and jet fuel. Higher transport costs can then feed into prices elsewhere in the economy.
The CBO estimates that year-on-year PCE inflation in the first quarter of 2027 will be 0.5 percentage points higher than it projected in February.
Its core PCE inflation projection is 0.3 percentage points higher.
The higher energy prices added an estimated 2.3% points to the annualised rate of overall PCE inflation in the second quarter of 2026, when the rate stood at 5.3 per cent, according to the agency.
The impact could reach US government borrowing costs.
It stressed that 3 month Treasury bill rates are estimated to be nearly 0.2 percentage points higher in 2026 than the CBO had projected in February.
These assessments do not capture every potential expense.
The CBO said it could not calculate additional costs associated with areas such as diplomatic operations and foreign aid because they would depend on how the conflict develops.
The Pentagon’s reported $45.1-billion calculation therefore provides the latest measure of the direct military price tag, rather than a final accounting of what the conflict will ultimately cost the United States.
