Iran war cost US $38bn and significantly depleted missile stockpile, report finds

The war in Iran has cost the US at least $38bn and left its stockpile of defensive missiles so depleted it could take five years to rebuild, the non-partisan Congressional Budget Office (CBO) has found, in a damaging report less than two months before midterm elections where the war and the cost of living crisis will likely hurt Republicans at the polls. The economic report comes one day after the Pentagon’s inspector general finally released its own first review of the war, saying that the US spent $22.3bn on munitions alone through 30 June, put total spending at $33.4bn and found the fighting had “resulted in strategic inventory shortfalls and revealed industrial base bottlenecks for munitions resupply”. The Pentagon’s report did not address an internal Pentagon investigation into the Minab school strike on the first day of the war, which killed 156 people, including 120 children. Critics have accused the Pentagon of burying the results of the investigation that would show negligence by the Pentagon in how it compiled targeting data for the initial strikes. The new $38bn estimate in the CBO report, which is some of the first public accounting of the cost of the war in Iran, was requested by the Democratic congressman Brendan Boyle, ranking member of the House budget committee. It also found that Iranian strikes had damaged or destroyed hundreds of buildings and structures at US bases in Kuwait, Bahrain, Qatar, UAE, Saudi Arabia, Iraq, Oman and Jordan. And it estimated that the cost would grow $3bn for every additional month the conflict continues, depending on its intensity, while noting that the war has driven up inflation. Much of that cost has come from missile defenses. Fending off Iranian ballistic missiles and drones has consumed such a large share of the US stockpile of Patriot, Thaad and Navy interceptors that CBO said rebuilding it “would probably take at least five years, even if production was increased”. In a White House statement responding to reports of the shortage, Donald Trump said the US had “far more munitions than anyone in the world” and “far more than we need”. Pete Hegseth, the defense secretary, separately dismissed a CNN report on the depleted stockpiles as “not true” in August. According to the CBO report, the shortage would be “especially problematic” in a hypothetical clash over Taiwan, because of the need for interceptors to engage “large numbers of ballistic and cruise missiles”. China maintains such an arsenal and is expanding it, the report noted, and any US-China conflict over Taiwan would likely require far more interceptors, deployed far more quickly, than the campaign against Iran has. Munitions have been the single largest driver of the Pentagon’s costs overall, CBO found: $21.7bn to replace weapons expended so far, of which $13.1bn went toward missile defense interceptors alone. The office also put a price on damage to American aircraft and equipment, including a destroyed Thaad radar system, and said it was forced to build its estimates largely from public reporting because the Pentagon did not respond to its requests for information. The report also found that increased energy costs, due in large part to the disruption of oil shipments through the strait of Hormuz, have increased inflation by half a percentage point compared with previous estimates. Brent crude jumped from $64 a barrel before the fighting to $103 at its peak, and CBO projects the war will leave inflation running 0.5 percentage points higher than expected by early 2027, with short-term interest rates already about 0.2 points higher than they otherwise would have been. It also said that the war had led to the “large expenditure of missile defense interceptors, which will leave the United States with a reduced inventory of interceptors for several years”. In June the White House requested $87.6bn in supplemental funding, of which $67.1bn was earmarked for the Pentagon. Once funding CBO judged unrelated to combat operations is stripped out (including money for cybersecurity, drones and classified programs), $42.3bn of the Pentagon’s request appears tied to the Iran conflict, about 10% above CBO’s estimate. The request included $12.1bn for classified programs CBO could not examine – a far larger share of secret funding than in past war supplementals. CBO further added that it still cannot estimate the cost of repairing bomb-damaged US bases, nor any future diplomatic and foreign aid costs tied to the war.

US forces fired more than $22 billion in munitions fighting Iran this year, draining critical weapons stockpiles in the process, a new Defense Department watchdog report says. The Pentagon inspector general's report, which was published Monday evening, estimated the cost of Operation Epic Fury, which began on February 28, to be $33.4 billion as of June 29. That tally includes $22.3 billion for expended munitions. The new report, which offers a fresh account of the war's financial impact, cites the munitions expenditure figure to the Pentagon's budget office and said the estimate was based on replacement costs. Munitions expenditure during the war "has resulted in strategic inventory shortfalls and revealed industrial base bottlenecks for munitions resupply," the report said. To address the issues, the report said, the Pentagon "is working to streamline procurement processes and production lead times" and to stockpile critical materials, components, and munitions. The White House and Pentagon leadership have repeatedly denied any reports of munitions shortages during the Iran war. Adm. Brad Cooper, head of US Central Command, which oversees American military operations in the Middle East, told CBS News recently that he was "not concerned" about munitions inventories and said the US is "armed and ready for any contingency." A US Marine Corps F-35 takes off in the Middle East. US Marine Corps photo US forces struck more than 13,000 Iranian targets during the first few weeks of the conflict, employing expensive missiles launched from fighter jets, warships, and ground-based launchers. American troops and assets also fired high-end interceptors to defend against Tehran's missiles and drones. The Center for Strategic and International Studies, a US think tank, assessed in late May that American forces had already fired thousands of cruise missiles and missile interceptors, draining pre-war stockpiles. Explore BI Games Take a smarter break in your day - and see how far you get. Play now Want more Business Insider in your news feed? Add BI in Google so our reporting is easier to find when you’re searching for what matters. Add to Preferred Sources CSIS found that Tomahawk land-attack cruise missiles and certain key interceptors — such as those launched from Terminal High Altitude Area Defense and Patriot batteries — would take years to return to pre-war inventory levels. These munitions cost millions of dollars apiece. While the pace of combat operations has decreased significantly since May, the US continued to trade strikes with Iran throughout the summer, further straining critical munitions stockpiles. The high rate of munitions expenditure has raised concerns that the US military may not be sufficiently armed for a future conflict against a near-peer adversary such as China or Russia, particularly with regard to stockpiles of long-range and standoff weapons. "Even before the current war, many analyses showed a need for larger munition inventories," CSIS experts wrote in July. "Operation Epic Fury has exacerbated this munitions problem, and a multiyear rebuild now looms ahead." The Pentagon inspector general's report also found that the US lost $3.7 billion in equipment during the war. Dozens of US military aircraft were damaged or destroyed, including fighter jets, refueling planes, combat drones, and helicopters. Some of the aircraft were struck by Iranian fire at their bases, while others were hit in the air during combat sorties or brought down by friendly forces.

Iranian strikes damaged and destroyed hundreds of buildings and structures at US military bases across the Middle East this year, a new Defense Department watchdog report has revealed. The Pentagon inspector general's report, released on Monday evening, offers a fresh look at the impact of the Iran war, including the scope of damage caused by Tehran's strikes against the US following the start of joint American-Israeli military action earlier this year. US bases in Kuwait, Bahrain, Qatar, the United Arab Emirates, Saudi Arabia, Iraq, Oman, and Jordan took damage, the report said. It cited information shared by US Central Command, which oversees American military operations in the Middle East. The report to Congress, which covers developments between April 1 and June 30, does not say how much it could cost to repair those facilities. It did acknowledge, however, that Iranian attacks on US diplomatic facilities in four countries caused roughly $184 million in damage. US and partner forces shot down more than 6,000 Iranian drones and 1,500 ballistic missiles that targeted their locations, but some munitions slipped past their air defenses, causing both damage and casualties across the region. Among the facilities struck during the fighting was a US naval base in Bahrain, the American Navy's main logistics hub supporting operations in the region. Tehran targeted the base with both ballistic missiles and drones, forcing the US to divert naval sustainment resources from Bahrain to alternate locations. Iranian forces launched thousands of missiles and drones at US and partner forces. Wana News Agency/via REUTERS The report said the establishment of support naval infrastructure "posed significant challenges" during Operation Epic Fury, partly due to uncertainty over port access from host countries. Distance was another factor. For instance, CENTCOM shifted logistics support to Diego Garcia, a joint US-UK base in the Indian Ocean, but that required logistics cycles of more than two weeks because of the extended sea transit, the report said. These logistical strains affected Navy warships supporting American combat operations, including USS Abraham Lincoln, which faced key supply issues before the aircraft carrier left the Middle East last month. The Pentagon has faced questions from Democratic lawmakers amid concerns over crew well-being. Explore BI Games Take a smarter break in your day - and see how far you get. Play now Want more Business Insider in your news feed? Add BI in Google so our reporting is easier to find when you’re searching for what matters. Add to Preferred Sources In addition to US military facilities, dozens of American aircraft were also damaged or destroyed during Operation Epic Fury, including fighters, refueling planes, helicopters, and combat drones, the report said, citing information from the Congressional Research Service. Some of the US aircraft were struck by Iranian fire on the ground at their bases, while others were hit in the air. Some aircraft were accidentally downed by friendly forces. The tally includes up to 30 MQ-9 Reaper drones destroyed "in various circumstances." They are estimated to cost upward of $30 million apiece. The Department of Defense spent an estimated $33.4 billion on Operation Epic Fury during the period covered by the report, it said. That figure includes $3.7 billion in equipment losses.