While military action in Iran has dragged on longer than the White House initially estimated, President Trump is still insistent that, in the grand scheme of things, the conflict doesn’t even constitute a war. But the cost of the military intervention—discounting the broader macroeconomic effect s arising from supply chain upheaval—is still high, and growing. A new report from the Congressional Budget Office (CBO) released yesterday found that as of August 1, 2026, the armed conflict with Iran has cost the Department of Defense approximately $38 billion.These funds reflect the cost of replacing expended munitions and equipment lost in battle, the CBO wrote, as well as increased flying hours, increased fuel costs, and “other operations.” The estimate doesn’t include spending already budgeted for, such as the basic running costs of the military involved in the conflict. It also doesn’t take into account increased costs for other parts of the federal government, such as increased fuel prices paid by the postal service. The total sum is also likely to have risen meaningfully since the beginning of August. If the conflict persists, the CBO notes, costs will increase: slowly if the level of violence remains low, but more rapidly if tensions escalate as they did in July. If tensions are relatively muted—as they were in May and June—the action would require roughly $2 billion per month in financing. If tensions were to escalate to the levels seen later in the summer, this would rise to $3 billion a month—and higher if the conflict spiraled beyond levels currently seen. The cost of the conflict thus far has come in below the additional sum the White House requested in June to fund the action. The CBO said the administration requested $87.6 billion in supplemental appropriations, of which $67.1 billion was to be funneled into the Department of Defense. “The portion of that request that appears to be directly related to the conflict, $42.3 billion, is about 10% larger than CBO’s estimate of DoD’s costs,” the CBO noted. Indeed, the CBO’s estimates are roughly on par with (if not below) other reports. Defense Secretary Pete Hegseth said in July that the war had thus far cost $37.5 billion, while The Hill reported this week that the Pentagon’s latest update to Congress was that the conflict now totalled $42 billion. Broader economic costs President Trump has been keen to downplay the magnitude the Middle East conflict is having on America. Trump defended Vice President J.D. Vance’s position that the conflict doesn’t warrant being called a war. Trump told reporters earlier this month: “A lot of people don’t call it a war, I call it a military conflict because it’s small potatoes for us, it’s not a thing.” Trump highlighted that while 18 U.S. service members have died in the conflict, this is significantly lower than wars in recent memory—and described the strikes as “intermittent.” The CBO echoed that “relatively few U.S. forces have been involved compared with the much larger and longer U.S. operations in Iraq and Afghanistan.” However, the financial costs to the federal budget and households are significant. In June, Moody’s estimated the cost to consumers for the Iran war is $750 a household—or $100 billion. Much of those extra costs have been passed on to households in the form of increased military spending and higher prices from oil supply disruption, according to Mark Zandi, chief economist at Moody’s Analytics. This story was originally featured on Fortune.com ...read more read less