The estimated cost of the U.S. war in Iran has ballooned to nearly $50 billion, officials told CBS on Thursday, a figure that doubles the Pentagon's public estimate of $25 billion from just a day earlier and intensifies the debate over the conflict's economic impact.
The rapidly changing figures underscore the financial strain of the two-month-old conflict. "Approximately, at this day, we’re spending about $25 billion on Operation Epic Fury. Most of that is ammunitions," Jules Hurst, performing the duties of the Pentagon comptroller, told the House Armed Services Committee on Wednesday.
The initial $25 billion disclosure, equivalent to this year's entire NASA budget, drew sharp rebukes from lawmakers who have long sought transparency on the war's cost. The subsequent leak of a $50 billion estimate suggests a much faster cash burn rate, roiling markets as investors price in a more prolonged and expensive engagement. Disruptions to oil shipments have already pushed the average U.S. gasoline price to a near four-year high.
Defense Secretary Pete Hegseth defended the cost as justified to prevent a nuclear Iran, asking lawmakers, "What would you pay to ensure Iran does not get a nuclear bomb?" The conflict, which began with U.S. strikes on February 28, has become deeply unpopular, with one recent poll showing just 34% of Americans approve of the war, placing President Trump's Republican party on the defensive six months before midterm elections.
Political and Economic Fallout
The soaring costs are providing ammunition to Democrats, who are linking the unpopular war to rising consumer prices. The conflict has disrupted global shipments of oil and natural gas, contributing to inflationary pressures on top of already high prices for consumers. "We've been asking for a hell of a long time, and no one's given us the number," Rep. Adam Smith, the top Democrat on the House Armed Services Committee, said in response to the initial cost disclosure.
Hegseth's defense of the war has been fiery, attacking Democratic lawmakers as "reckless, feckless, and defeatist" for their criticism. The Pentagon has deployed tens of thousands of additional troops and maintained three aircraft carriers in the Middle East. The war has resulted in 13 U.S. troop deaths and hundreds of wounded.
Market Volatility and Future Costs
The doubling of the cost estimate in a single day points to a significant escalation in military operations or a revised projection for a longer conflict. This heightened geopolitical uncertainty is expected to fuel further volatility in the market.
The surge in military spending could provide a tailwind for defense sector stocks. However, the broader market may react negatively to the inflationary pressures caused by rising energy prices and the potential for a wider conflict. The initial Reuters report noted that the first six days of the war alone were estimated to have cost over $11 billion, suggesting the true total cost may continue to climb significantly. Investors may increasingly move toward safe-haven assets like gold and the U.S. dollar as the situation develops.
This article is for informational purposes only and does not constitute investment advice.
