The US military campaign against Iran, designated as Operation Epic Fury, cost the Pentagon approximately $38 billion through July and could consume an additional $2 billion to $3 billion each month, according to a report by the Congressional Budget Office (CBO). The conflict began with its initial phase on February 28, leading to a ceasefire on April 8 that was later declared over by President Donald Trump on July 10 following attacks on oil tankers in the Strait of Hormuz.
The $38 billion expenditure breaks down into several key operational areas. Replacing expended munitions was the largest single expense, totaling $21.7 billion which includes $13.1 billion for missile-defense interceptors and $7.3 billion for land-attack cruise missiles. Additionally, the campaign incurred $10.4 billion in additional flying hours, $2.7 billion in higher military fuel costs, $1.9 billion for combat-lost equipment, and $1.5 billion in other operational expenses. However, the CBO noted that these figures exclude facility repairs, diplomatic operations, foreign assistance, and long-term veteran medical or disability costs. Furthermore, because the Pentagon did not fulfill data requests, the findings rely on government databases and public reports, leaving the estimates subject to considerable uncertainty.
Severe Depletion of Missile-Defense Inventories:
The CBO report warns that the United States has likely exhausted between one-half and two-thirds of its total inventory of missile-defense interceptors since June 2025. Rebuilding these critical stocks could take at least five years, even with accelerated procurement by the Pentagon. Analysts caution that this shortfall poses a serious strategic risk if a conflict arises with an adversary possessing large quantities of ballistic and cruise missiles.
Broader Economic and Inflationary Impact:
Beyond military expenditures, the ongoing conflict has severely disrupted oil and natural gas shipments through the Strait of Hormuz alongside maritime traffic in the Red Sea. The resulting rise in energy expenses added 2.3 percentage points to the annualized inflation rate during the second quarter of 2026. Moreover, inflation in the first quarter of 2027 is projected to be 0.5 percentage points higher than pre-war forecasts, which will likely push up interest rates on US Treasury securities.
Administration Funding Requests:
In response to escalating operational needs, US Defense Secretary Pete Hegseth informed Congress in July that operations against Iran would total $37.5 billion through September. Consequently, the White House has formally requested $87.6 billion in supplemental funding including $67.1 billion designated for the Pentagon with the CBO estimating that roughly $42.3 billion of that defense request is directly tied to the Iran conflict.
