CBO puts the Iran war at $38 billion through 1 August, then $2-3 billion a month

The Congressional Budget Office told the House on 15 September that the war with Iran had cost the Defense Department $38.1 billion through 1 August. The office expects another $2 billion to $3 billion a month for as long as the campaign runs at the present tempo. Defense Secretary Pete Hegseth had put the figure at $37.5 billion in Senate testimony on 21 July. The two estimates sit within a billion dollars of each other. CBO got there without Pentagon data. The department did not answer the office’s information requests. Analysts used public databases and press reporting instead.

Most of the money is ammunition. CBO assigns $21.7 billion to replacing missiles and air defences: $13.1 billion for interceptors, $7.3 billion for cruise missiles and $1.2 billion for other rounds. The rest covers lost equipment, extra flying hours, fuel and the higher operating rate that follows a six-month air-and-naval war. The office says it could take at least five years to put the stockpiles back. That sentence is the part combatant commanders will read twice. Interceptors fired in the Gulf are interceptors that cannot sit in a Pacific magazine.

What the $38 billion does not include

The letter is 19 pages and narrow on purpose. It does not count dead or wounded American personnel. It does not count future veterans’ health and disability. It does not count interest on the borrowing that finances the war. It does not count the latest strikes on commercial ships in the Strait of Hormuz or attacks on American bases after the 1 August cutoff. Those lines would lift the total. How much, CBO would not say.

The macroeconomic paragraph is shorter and sharper. Reduced oil and gas shipments through Hormuz, plus Red Sea disruption, lead the office to raise its inflation path by about 0.5 percentage points in the first quarter of 2027. That is a forecast, not a print. It is also the first time the scorekeeper has tied this war to a dated inflation increment.

Representative Brendan Boyle, the senior Democrat on the House Budget Committee, asked for the assessment. He said the human cost sits beside “tens of billions of dollars and counting.” The political use of the paper is obvious with midterms in November. The arithmetic is still the arithmetic. Six months, $38 billion, most of it missiles, and a five-year restock.

How this sits next to the oil market

Brent has been hovering near $107. India’s commerce secretary briefed a 26 percent export jump the same day CBO published. Those two facts share a cause. A blocked or risky Hormuz lifts crude, lifts India’s import bill, and lifts the replacement cost of every interceptor the Navy and Air Force have already fired. CBO’s monthly run-rate of $2 billion to $3 billion assumes the present intensity. A ceasefire would cut it. A wider tanker war would raise it. The office did not model either branch.

The practical question for the Pentagon is industrial, not rhetorical. Can American and allied plants make interceptors faster than the Gulf is using them? CBO’s five-year rebuild clock is an answer of sorts: not at the current burn. That clock will matter in any other theatre that needs the same missiles before 2031.