Follow Al Rai
The Congressional Budget Office reported on Tuesday that the war launched by the United States and Israel against Iran in late February has cost Washington about $38 billion as of August 1.
The Office's report stated, "As of August 1, 2026, the cost of the armed conflict with Iran (to the Department of Defense) was approximately $38 billion."
Defense Secretary Pete Higsith estimated in July that the war cost $37.5 billion.
The Budget Office reported that the monthly cost of the conflict could range between $2 billion and $3 billion, depending on the intensity of hostilities.
It warned that if the conflict continues, the cost could become "higher if violence escalates."
The report noted that the figures include the cost of replenishing ammunition and equipment lost in battles, as well as increased fuel costs for the military, among other things.
The Office prepared its analysis at the request of Democratic representatives.
It estimated that the main economic impact of the conflict with Iran is the inflationary pressures resulting from disruptions in oil and natural gas prices due to Tehran's closure of the Strait of Hormuz.
The Budget Office estimates that the inflation (consumer price index) in the first quarter of next year will be 0.5 percentage points higher than it expected in February.
It is likely that "core inflation," which excludes food and energy sectors, will also be 0.3 percentage points higher than previous estimates.
It believes that rising inflation will also lead to higher interest rates on U.S. Treasury bonds.
Know more about this story?Send us a tip
Ask about this report — answers stay grounded in its text.
