Assessing the Cost of the Iran War for the United States

The war against Iran, which the United States (US) and Israel opened on 28 February 2026 with Operation Epic Fury, was presented to the American public as a swift and contained operation. Nearly five months later, with the Islamabad Memorandum of Understanding (MoU) in ruins and open hostilities resumed, it has become something the administration did not prepare the country for: a protracted and expensive war of choice whose costs are compounding across every dimension that matters to a modern state. This report assesses those costs from the perspective of the US alone. It counts the human toll borne by American service members, the materiel lost in combat, the direct financial burden on the Treasury, the shock transmitted through the global energy market, the inflationary pressure imposed on American households, and the political confrontation now unfolding between a president seeking to fund a widening war and a Congress increasingly unwilling to authorise it.

The central finding is that the war has already cost far more than its architects acknowledged and that its resumption has removed the ceiling the June settlement briefly imposed on those costs. The direct military expenditure of the initial campaign has been estimated by the Center for Strategic and International Studies (CSIS) at between $34 and $42 billion, a figure that excludes the far larger sums the administration has since sought from Congress. The Office of Management and Budget submitted a supplemental request for $87.6 billion, and members of Congress have cited a reported ceiling of $200 billion for the war and associated bills. The 13 American service members have been confirmed killed, and more than 200 wounded, and 42 American aircraft were lost or damaged in the opening campaign alone. The closure of the Strait of Hormuz, through which roughly a fifth of the world’s oil passes, drove Brent crude above 110 dollars a barrel at its first-phase peak and pushed American consumer price inflation to a three-year high of four point two per cent in May 2026.

The war’s resumption in July 2026 has reopened each of these cost channels. The US has relaunched strikes at the president’s direction, reimposed its naval blockade, and again seen its bases across the Gulf targeted by Iranian missiles and drones; oil has climbed back above eighty dollars a barrel, and the disinflation that the June truce briefly delivered has been placed in jeopardy. The report concludes that a prolonged war carries a distinctive and escalating danger for the US: not military defeat, which is not in prospect, but the slow exhaustion of fiscal capacity, the entrenchment of inflation, and the erosion of the domestic political consensus on which sustained military operations ultimately depend. The costs assessed here are, on present trends, more likely to accelerate than to abate.