Financial Cost of the Iran Operation is Growing for the Pentagon
The US Congressional Budget Office announced that Pentagon expenditures have risen to $38 billion following the operations that began in February.
According to a report published by the US Congressional Budget Office, the cost of military operations against Iran to the Pentagon reached approximately $38 billion as of August 1. The report also drew attention to the decrease in defense stockpiles and global economic impacts, alongside the rising expenditures.
Distribution of Operational Expenditures
The US Congressional Budget Office (CBO) examined the cost of the campaign launched at the end of February under the name Operation Epic Fury across four categories: operational expenditures, opportunity costs, economic impacts, and potential additional expenses. It was reported that the cost of the operation reached $38 billion as of August 1.
Reasons for Cost Increases
The report stated that the specified costs stemmed from the replenishment of consumed ammunition, equipment lost in combat, increased flight hours, field operations, and rising fuel expenses.
Future Additional Cost Projections
Stating that costs would increase if the conflicts continue, the report projected that each additional month the duration extends would generate an extra cost of $2 to $3 billion depending on the level of intensity, and that this figure would rise in the event of an escalation of conflicts.
Risks in Air Defense Stockpiles
It was emphasized that the greatest opportunity cost for the Pentagon stems from the air defense missiles used. It was noted that the declining stockpiles would weaken the US inventory and create security risks in potential crises with countries like China.
Global Energy and Inflation Impacts
It was stated that shipment disruptions in the Strait of Hormuz and the Red Sea have driven up prices for crude oil, gasoline, diesel, and jet fuel. It was conveyed that increasing logistics costs are creating upward pressure on consumer prices.
Expectations for Inflation and Treasury Yields
The report stated that personal consumption expenditures price index inflation in the first quarter of 2027 is expected to come in 0.5 percentage points above previous forecasts, and core inflation 0.3 percentage points above, and further noted that high inflation has driven up Treasury bond yields.