Global
As the conflict with Iran enters its sixth month, its financial toll is escalating, surpassing tens of billions of dollars Washington has allocated for military operations and munitions. Estimates, reported by "The Washington Post," suggest the total cost could reach approximately one trillion dollars in the long term. American lawmakers are locked in debate over a plan to fund the war, while American consumers face increasing burdens, notably rising fuel prices due to supply disruptions caused by the conflict. Globally, people are experiencing shortages and price hikes, partly linked to the closure of the Strait of Hormuz to commercial shipping, prompting U.S. allies to push for an agreement to reopen it. U.S. officials are warning of a potential funding crisis within the Department of War and a severe shortage of munitions. This crisis led to a public dispute between President Donald Trump and Secretary of War Pete Hegseth last week, according to the newspaper. **Military Costs** The conflict began on February 28 with a joint American-Israeli attack targeting Iranian sites. By September, the U.S. military is estimated to have incurred approximately $37.5 billion in war-related costs, funded by taxpayers, excluding damages to American bases in the region from Iranian attacks. These are the latest estimates from Hegseth, presented during a hearing last month, where he urged lawmakers to approve an additional $67 billion in funding to cover war expenses, including replenishing some weapons stockpiles. The U.S. House of Representatives approved approximately $73 billion for the Iran conflict at the end of last month, although not all of this amount will go directly to the Department of War. The Republican-controlled Senate is fast-tracking its approval, alongside a temporary funding measure, before Washington departs for the summer recess that began on Friday. On July 22, House Republicans passed a $1.15 trillion defense policy bill, which included a $95 billion budget plan providing about $73 billion for military funding and relief, in addition to farmer aid and other election-related measures. Some analysts estimate the cost of the war at figures higher than the Pentagon's assessments, based on their own calculations and projections. Mark F. Cancian, an expert at the Center for Strategic and International Studies, estimated the war's cost in June to be between $35.2 and $42.5 billion. This estimate accounts only for additional costs incurred by the Department of War due to the conflict, as many operational activities were already included in the baseline budget. The center's estimate is based on six main categories of expenditure: troop deployment, munitions, increased operational tempo, equipment losses, damage to bases, and rising fuel prices. Munitions are considered the primary driver of these costs, with Cancian estimating their value at over $26.1 billion. The United States has depleted a significant portion of its advanced air defense interceptor missile inventory. According to "The Washington Post" reports, Washington used more advanced munitions to defend Israel than Israeli forces themselves used against Iran. In contrast, Iran relies on much less expensive munitions, leading to a noticeable disparity in military costs between the two sides. In a related context, the highest-ranking U.S. general in Europe warned the Pentagon about insufficient naval forces available to continue protecting Israel from ballistic missiles. Last week, Trump expressed his anger at Hegseth regarding this issue, demanding explanations for his feeling of being misled about munitions shortages, as reported by two individuals familiar with the discussion to "The Washington Post." U.S. officials had informed the newspaper in May that the United States launched over 200 THAAD interceptor missiles to defend Israel, representing approximately half of the Pentagon's total inventory. The cost of a single THAAD interceptor missile is about $15 million. Analysts noted that replenishing this inventory would now incur higher costs. **Cost of Missile Replenishment** Regarding Tomahawk missiles, which are long-range American cruise missiles, the cost of one exceeds two million dollars, but their re-manufacture could cost double that amount, according to Linda J. Bilmes, a public policy professor at Harvard University's Kennedy School. She added that military fuel stockpiles were also purchased at a lower cost than their current replacement cost. The initial days of the conflict were particularly costly. The Pentagon consumed $5.6 billion worth of munitions during the first two days of the war, as reported by U.S. officials to "The Washington Post." Within the first four weeks of the war, the United States launched over 850 Tomahawk cruise missiles, while only a few hundred are manufactured annually. Costs continue to rise as military operations in the region persist, even with the reduction in strike levels following the temporary ceasefire agreement reached by Trump in June. Damage to U.S. military bases has also been costly, with the Department of War stating that repair costs have not yet been included in its initial estimates. A visual analysis conducted by "The Washington Post" of satellite images revealed that the extent of destruction to U.S. military sites is far greater than publicly acknowledged by the U.S. government. By May alone, Iranian airstrikes damaged or destroyed at least 228 facilities or pieces of equipment at U.S. military locations across the Middle East. The American Enterprise Institute estimated that damage to U.S. military bases in the region, including those in Qatar and the UAE, could exceed $5 billion. This estimate includes reconstruction and repair costs, as well as indirect costs such as design and engineering. In May, the Congressional Research Service reported that at least 42 aircraft were lost or damaged, portending potential budgetary implications. Elaine McCusker, from the American Enterprise Institute, estimated the total cost of Operation "Epic Fury" (which includes the Iran conflict) at approximately $38.6 billion by June. McCusker, a fellow at the institute and former Pentagon official, emphasized the importance of "assessing the cost of the conflict against the value Americans receive in return." She estimated the military operation's cost at about $115 per American citizen to date, based on an estimated $39 billion for the operation divided by the total U.S. population. The current year's defense budget is approximately one trillion dollars, while the Trump administration requested a budget of $1.5 trillion for the upcoming year. This request raises concerns in Congress, including the potential for adding to the current national debt of $39 trillion. **War Costs for Consumers** In addition to the direct costs borne by taxpayers, the war imposes indirect burdens, most notably those endured by consumers due to rising prices amidst the disruptions caused by the conflict. Gabe Murphy, a policy analyst at "Taxpayers for Common Sense," an independent budgetary watchdog, stated that "the indirect cost of this conflict could far outweigh the direct costs in the coming years." Trump described rising fuel prices as "trivial" when compared to the potential threat of Iran acquiring a nuclear weapon. By comparing the current war scenario with a hypothetical scenario where the conflict did not erupt, Brown University's Climate Solutions Lab estimated that the additional costs borne by Americans for gasoline and diesel since the war's onset have exceeded $79.8 billion, equivalent to about $609 per American household. The report indicates that this figure continues to rise.
