Politics8 min read
What the Iran war cost the Pentagon, the economy — and Trump
By
Zachary B. Wolf,
David Goldman,
Kaanita Iyer53 min ago
Donald TrumpInflationEconomyInvesting
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President Donald Trump at Paris Orly Airport in France, on June 17. Mandel Ngan/AFP/Getty Images
With an agreement signed and further talks set to commence, the US war with Iran is at a halt, at least for now, and President Donald Trump is telling Americans they have won.
“’YOU’RE WELCOME!” Trump wrote on Thursday in a post on his social media platform, where he also ticked through benefits of his memorandum of understanding to keep negotiating with Iran for the next 60 days.
“OIL IS FLOWING, IRAN CAN NEVER HAVE A NUCLEAR WEAPON (THE WORLD WILL BE SAFE!), THE STOCK MARKETS ARE ROARING, JOBS ARE AT RECORDS, AND PRICES ARE DROPPING (AFFORDABILITY!). OUR COUNTRY IS STRONG, SAFE, AND RESPECTED LIKE NEVER BEFORE,” Trump said.
But an objective analysis of what has changed after more than 100 days of the conflict, in which 13 American service members lost their lives along with more than 7,500 civilians in the region, suggests a more nuanced story than the one Trump put in all caps.
Here are some of the big numbers and trends that draw a fuller picture of how the war affected the US:
The sticker price of the war is around $40 billion, but the total price is much higher
The conflict cost the Department of Defense is about $40 billion, according to preliminary numbers from an upcoming analysis from the Center for Strategic and International Studies.
The figure includes cost of munitions, destroyed equipment and damage to bases, but does not incorporate operational costs that were already factored into the department’s more than $1 trillion fiscal year 2026 budget, Mark Cancian, a senior adviser at CSIS, told CNN.
The Pentagon has submitted a request for $80 billion in supplemental funding, two US government sources told CNN. Less than $20 billion of that total request is related to immediate needs from the Iran war, according to one source, who added that the figure does not include costs like repairs to facilities and US basing in the region.
That includes around $26 billion spent on munitions
Munitions were the largest expenditure, Cancian said, adding that there was a “high use” of weapons that were long-range, highly sophisticated and expensive.
For example, a Tomahawk missile costs around $2.5 million, and the US used about a thousand of them, according to Cancian.
The war put a strain on the US’ stockpile of weapons
The USS Thomas Hudner fires a Tomahawk land attack missile on March 1. U.S. Navy/Reuters
Experts and officials tell CNN that the military used significant portions of key missile inventory. Trump
invoked the Defense Production Act earlier in June to force defense companies to manufacture more weapons.
The daily cost of the war waned as it went on with less frequent strikes and decreased use of expensive weapons, according to CSIS, which estimated that the
first 100 hours of the war cost $3.7 billion. On
day 12, the cumulative cost was around $16.5 billion, the think tank found.
While the Defense Department bore the brunt of the expenses, the conflict cost other agencies, such as Homeland Security and Veterans Affairs, $1 billion, according to CSIS’ preliminary numbers. Approximately $165 million of that was related to “higher fuel prices,” Cancian said.
Gas prices are still up
The war drove the price of gas up, a bitter pill for Trump, who has made reliance on fossil fuels drilling a key part of his agenda. But while the US has been the top oil and gas producer for years, the market is complex and worldwide. Gas prices rose from an average of less than $3 per gallon around the country to well more than $4 during much of the war.
Now that oil traffic is set to flow again through the Strait of Hormuz, look for prices to come down. But it will likely take time. The US average was $3.97 a gallon on Friday. On Thursday, it dropped below $4 for the first time since March 30.
According to an energy cost tracker from
Brown University, American households have spent more than $253 more than what they would have paid if there was no war.
Diesel is up even more, which has a knock-on effect
Everyday Americans have been feeling the pinch of gas prices, but farmers and shippers have been feeling the pinch from diesel. The average price was about $3.80 before the war started. It is
over $5 as of June 15, which is down from earlier in the war.
Brown University’s energy cost tracker found that due to the increased price, Americans spent nearly $27.1 billion extra for diesel.
The war also drove up the price of fertilizer, which could have a long-term effect on farming.
The strategic petroleum reserve is at its lowest level since 1983
The nation’s emergency reserve of oil, kept in salt caverns in the gulf coast, has been depleted both by the Biden administration as a result of Russia’s war on Ukraine and the Trump administration as a result of Trump’s war on Iran. As
CNN’s Matt Egan reported, the reserve is now at its lowest level since 1983, when it was first being filled during the Reagan administration.
The world has lost 1.15 billion barrels of oil supply
Oil hasn’t been coming out of the Middle East for nearly four months. All told, the world lost 1.15 billion barrels of oil supply during the war, according to Kpler.
So, the world has been taking crude from just about everywhere else it can get some.
Venezuela and Brazil ramped up production. The United States sent loads of jet fuel to Europe and diesel to Australia. The Trump administration de-sanctioned hundreds of millions of barrels of Russian and Iranian oil. And 32 countries coordinated the largest release of emergency oil stockpiles in history.
That still wasn’t enough. So oil companies started drawing from their own supplies to satisfy their customers’ demand.
The tanks in Cushing, Oklahoma, are running out of oil
A critical oil hub in Cushing, Oklahoma, which pipes fuel all around the United States, just hit its operational stress level – the equivalent of when the coffee drops below the spigot and you need to tip the urn to get the last bits of sludge into your mug. Much of what collects at the bottom of an oil tank is unusable gunk, making it hard to maintain pressure in the pipes to get oil out to customers.
The US Energy Information Administration reported last week that Cushing had just 20 million barrels of oil left in its tanks. That’s a problem that Trump acknowledged Wednesday at the G7 in Versailles.
“You want to see bedlam?” Trump said. “We run out of reserves in about four weeks.”
Inflation is up
Trump has struggled to find a compelling political argument to explain why his policies have helped drive up prices. He has at times said the idea of “affordability” is a hoax. More recently, he said, “
I love the inflation,” arguing it could be much worse and that when the war ended “it’s going to come down like a rock.”
But there’s a difference between inflation coming down, which means prices don’t rise as quickly, and prices actually falling.
Annual inflation
was over 4% for the first time in three years, driven by those energy prices, according to recent data from the Bureau of Labor Statistics. That’s far from the highs of the Covid years, but double what the Federal Reserve generally wants to see before it lowers interest rates. The persistently high inflation helps explain why the Fed
declined to cut rates last week, as Trump wants, despite now being led by his hand-picked Chairman Kevin Warsh.
But prices are now rising faster than the average American paycheck grew over the past year. In other words: Inflation ate your pay raise in April and May, the first time that had happened since 2023.
Consumer confidence is up a tick, but still near historic lows
There is some evidence of optimism among Americans. After three consecutive months falling, consumer sentiment rose in June, according to a long-running survey conducted by the University of Michigan. But it is still well below historic averages.
The general lack of confidence is not just a result of the war, as
CNN’s Bryan Mena wrote.
Sentiment is going through a yearslong rough patch for a number of reasons, but it’s mainly due to the price shocks of recent years compounding to worsen affordability, though there are signs consumers may be getting used to it… Since 2020, Americans have endured several, back-to-back, historic events affecting the economy. That means there really hasn’t been a long and sustained period of rising sentiment to recover from the economic shocks of recent years.
Stocks are up
Market indices dipped in the immediate aftermath of the war, but Trump can continue to brag (and repeatedly has) that markets have continued to set records despite the war. Americans might be generally pessimistic about the economy in part as a result of inflation and rising gas prices caused by the war, but investors remain committed. Add in some big ticket IPOs from SpaceX and in the AI sector and, despite the war, people who feel good about their 401k balance if they’re lucky enough to have one.
Bonds are way down
Bonds have been selling off because of growing inflation concerns because of rising gas prices during the war. That sent the benchmark 10-year US Treasury yield to its highest level in more than a year in May, before it fell back a bit.
The 10-year yield influences consumer loan rates, including credit cards, auto loans and home mortgages.
Mortgage rates are way up
The average 30-year fixed mortgage rate fell to 6.47% last week, down from 6.52% the previous week, which was near the year’s high, according to Freddie Mac. Higher bond yields have pushed mortgage rates higher, keeping the housing market frozen and preventing people who can’t afford the American Dream from achieving it.
Rates may continue to rise: Federal Reserve Chair Kevin Warsh in his first meeting as chair last week said that the central bank would make a stronger push to get price hikes in check. The market now expects the Fed to hike rates later this year, potentially raising mortgage rates along with it.
Trump’s approval rating is down. But it was already extremely low
The president has a committed core of supporters, but most of the country disapproves of how he’s handling his job. As a result, his rating was already dipping below 40% before the war started. Just 38% of Americans approved of Trump’s job performance in February. That figure is at 37%, as of June 15, according to
CNN’s Poll of Polls.
Trump’s handling of the war and of the economy are similarly under water, according to a recent
Fox News poll, in which 31% of registered voters approved of his handling of the economy and 35% approved of his handling of Iran.
CNN’s Haley Britzky contributed to this report.
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