The shaky peace deal in place between the United States, Israel, and Iran was called into question once again this week with the U.S. and Iran trading retaliatory strikes. It prompted President Donald Trump to declare, “I think it’s over” of the ceasefire, even as he said that negotiations could continue. On June 17, leaders signed a memorandum of understanding that gave them 60 days to reach a peace deal.
In the meantime, experts have begun to tally the cost of the Iran war. While direct U.S. military operations in Iran are now estimated at up to $42 billion, long-term economic and veteran expenses may push the cost higher. Whatever the final number, Trump administration officials have already acknowledged that the war’s price tag will be higher than initial estimates.
It rose by about $4 billion in two weeks late this spring, when Pentagon comptroller Jules Hurst told lawmakers that the Department of Defense estimate for the war, eight weeks in, had jumped from $25 billion to $29 billion. (The initial U.S. Pentagon estimate for the Iran conflict was roughly $11.3 billion for the first six days of the operation.)
Why We Wrote This
The Iran war’s cost to Americans has already climbed well beyond early estimates, with an $87 billion funding request pending. Long-term economic and veteran expenses push the broader cost higher. And new attacks call into question whether the hostilities will soon end.
This $29 billion tally did not include repairs to U.S. bases in the Middle East – repairs that could add at least $5 billion more to the cost, according to the conservative American Enterprise Institute (AEI) think tank. On Wednesday, Iran said that it had shot down an MQ-9 Reaper drone and struck 85 U.S. military sites, potentially adding to the bill.
Analysts are also assessing the human toll. Thirteen American service members have been killed and some 400 injured in the conflict, along with Iran’s reported 1,700 civilian fatalities. The loss of mothers, fathers, children, and siblings is a cost, they add, that can never be calculated.
The expense could climb higher still, with the ongoing tit-for-tat strikes between Iran and the U.S.
To help cover the price of everyday operations, troop deployments, and weapon replacements, the White House has submitted an $87 billion supplemental funding request to Congress, an ask likely to face sharp bipartisan scrutiny. Other researchers estimate that the broader economic toll (such as higher fuel and food costs) is costing households up to $1,000 each.
What have been the biggest cost drivers of the war?
Missiles and other munitions have been the U.S. military’s biggest war-related expenses to date, totaling some $26 billion, according to a June 23 report from the Center for Strategic and International Studies (CSIS).
“The thing that probably surprises me most was just how big a chunk of the cost was in munitions, particularly the high-end, expensive munitions,” says Mark Cancian, senior adviser with the CSIS Defense and Security Department and the report’s co-author.
Adm. Brad Cooper, the head of U.S. Central Command, which runs U.S. military operations in the Middle East, told lawmakers in a May hearing that by the time of the ceasefire, the U.S. had fired 13,629 munitions in strikes on more than 13,000 targets.
“U.S. forces fired many expensive missiles,” the CSIS report noted. This includes more than 1,000 Tomahawks, for example, at about $2.6 million each. The cost of interceptors to counter Iranian strikes ranges from some $28 million for an SM-3 ship-launched interceptor – designed to destroy missiles while they’re still in space – to $12 million for each THAAD interceptor and $5 million for each Patriot missile.
“The coalition’s success in rapidly suppressing Iranian air defense systems greatly reduced the daily cost of munitions,” according to the CSIS report.
“The first couple of days chewed up probably half the ammunition cost,” Mr. Cancian says. “Once we beat down their air defenses, then we could fly over Iran and use much less expensive munitions,” at a cost of $100,000 each rather than millions.
What are the biggest-ticket items that will need to be replaced?
Forty-two U.S. military aircraft have been lost or damaged in the war, according to the Congressional Research Service.
The cost of repairing damaged aircraft “is assumed to be 25 to 75 percent of the replacement cost,” according to the CSIS report.
Then there is the damage to U.S. military bases in the Middle East. Though the U.S. and its allies have intercepted 90% of the missiles and drones that Iran launched against these installations, the damage that Iran’s munitions caused when they did strike could total between $5 billion, as the AEI report estimated, and $9.4 billion, according to other analysts.
It’s unclear how many buildings at these installations have been struck, but satellite damage assessment suggests about 228 structures have been affected.
What precisely was inside those buildings is another matter. “For some, such as barracks and gyms, the material contents were not particularly valuable,” the CSIS report notes. “For warehouses, however, the contents could be as valuable as the building itself.”
How about the price of fuel?
The Department of Defense is particularly affected by the increased global oil prices that followed the closure of the Strait of Hormuz, as one of the world’s largest consumers of petroleum, for example, accounting for between 80% and 90% of the fuel consumed by the federal government.
These costs have most affected the Air Force in the Iran war, with its need for jet fuel, and the Navy, which powers ships and its own aircraft.
The war has also cost consumers in higher fuel and food prices. From the start of the war until mid-May, Americans have spent more than $40 billion on extra gasoline and fuel costs, or roughly $300 per household, above what they had been paying in February, according to a Costs of War study from Brown University.
This exceeds the estimated cost of completely revamping the U.S. air traffic control system, and could also pay for the 2024 Bridge Investment Program to repair and modernize more than 10,200 of America’s bridges, the study adds.
What are the additional costs over time?
The approximately 400 service members who have been injured during the war may need, after immediate care, additional medical and disability services over time at a price of some $400 million annually, according to the CSIS study.
Roughly 37% of veterans from the Gulf War in 1991 receive lifetime disability benefits. After a massive March fire on the USS Gerald R. Ford aircraft carrier, while it was operating in the Red Sea in support of the Iran war, some 600 sailors were exposed to serious smoke inhalation, notes an April report from the Harvard Kennedy School.
“If even one-third of the 55,000 troops deployed [to the Middle East for the Iran war] today claim benefits,” it says, “then we are committing ourselves to tens or hundreds of billions of dollars in disability and medical care costs for this cohort alone.”
The U.S. currently owes $7.3 trillion in disability benefits alone to veterans of previous wars, the report adds.