Pentagon Says Iran War Cost $25Bn But Analysts Are Not Convinced—Here's Why

• Pentagon estimates Iran war cost at $25bn, likely understated

• Analysts say real costs could exceed estimates due to excluded expenses

• Hardware losses, naval operations and munitions already cost over $14bn

Pentagon's acting comptroller finally put a price tag on the Iran war at a congressional hearing on Wednesday. The $25bn figure was meant to provide clarity but it has raised more questions because analysts say the number understates the true cost by a substantial margin, and possibly by a multiple.

Bloomberg's calculations, based on Pentagon data, put the cost of munitions expended, equipment destroyed and naval operations at as much as $14bn and that covers only a portion of the total picture. The breakdown includes roughly $8bn for some categories of munitions, $5bn to replace aircraft and equipment lost during combat operations, and approximately $1bn in operating costs for two aircraft carriers and 16 destroyers across 39 days of near-constant strikes.

That figure excludes significant additional expenses such as the cost of repairing facilities damaged by Iranian retaliatory strikes across the region, including the US Navy's Fifth Fleet headquarters in Bahrain, which was hit repeatedly, the operational costs of the full naval and air buildup that preceded the February 28 assault, and the ongoing costs of the current naval blockade.

"The Pentagon's $25bn figure is clearly a narrow accounting of what it cost to fight the war," said Kelly Grieco, a senior fellow at the Stimson Center. "And that doesn't even account for base damage, operating costs, the Pentagon's own rising fuel bills."

Estimates That Go Far Higher

Senator Richard Blumenthal told the new agency Television earlier this month that even the $ 2bn-per-day figure he had been given in briefings was "a low-ball figure." The Centre for Strategic and International Studies had already placed the cost of munitions alone at around $25bn — equivalent to the Pentagon's entire declared war cost before any other expense is added.

During Wednesday's hearing, acting comptroller Jules Hurst said the $25bn figure incorporated expended munitions and operational costs but declined to provide any detailed breakdown. That refusal prompted a sharp exchange with Representative Maggie Goodlander of New Hampshire, who pressed him repeatedly for specifics. "It's an extraordinary dereliction that, as you sit here, you can't account for billions of dollars that have been spent," she told him.

The Lost Hardware

The US has lost dozens of aircraft during combat operations, including MQ-9 Reaper drones, F-15E strike fighters, an E-3 airborne warning and control aircraft, KC-135 aerial refuelling tankers, at least one A-10 attack aircraft and two MC-130J multi-purpose transport planes. Replacing that hardware would run to billions of dollars. Radar systems lost or damaged during the campaign carry price tags of hundreds of millions of dollars each.

On the naval side, the daily operating cost of an aircraft carrier runs to approximately $4.9mn, whilst a destroyer costs around $600,000 per day. A carrier air wing — US Navy strike fighters have conducted thousands of sorties against Iranian targets — adds approximately $3.8mn per day. Bloomberg's defence economics analysis calculates that 39 days of combat operations for two carriers with their air wings and 16 destroyers alone account for around $1bn in running costs.

The Missile Defence Bill

Iran launched more than 1,850 ballistic missiles at targets across the region during the conflict. Standard missile defence doctrine calls for at least two interceptors to be fired at each incoming target, implying the use of approximately 4,000 interceptors in total. Whilst the PAC-3 system is the primary ballistic missile defence asset in the region, the majority of intercepts would have been carried out by Gulf partner nations — a cost that does not appear in American accounting but carries its own strategic and financial weight.

Taken together, the picture that emerges is of a war whose financial costs the administration has been reluctant to quantify in full, and whose true bill — once equipment replacement, base repair, ongoing blockade operations and allied defence expenditure are accounted for is almost certainly a multiple of the figure presented to Congress on Wednesday.