$38 Billion and Rising: Iran War's Economic Toll Mounts

The Iran war has cost the US more than $38 billion in its first five months, according to a report by the Congressional Budget Office (CBO). The CBO estimates that monthly expenses will continue at around $3 billion, which is in line with Defense Secretary Pete Hegseth's earlier estimate of $37.5 billion.

The war has had significant economic impacts, including higher gas prices and inflation. According to the CBO, the conflict has added half a percent to inflation into the first quarter of 2027. This is largely due to reduced oil and natural gas shipments through the Strait of Hormuz and disruptions to shipping through the Red Sea.

Gas prices have increased significantly since the war began in February, with regular gas now at $4.37 per gallon, a 47% increase from before the conflict started. Diesel has also seen significant price hikes, reaching an average of $6.31 per gallon over the past few days. This added cost of shipping is likely to be passed on to consumers.