Estimated Costs of Epic Fury and the Potential Supplemental Request

We estimate the cost of Operation Epic Fury is $26.5–$36 billion. The estimate cost drivers are summarized by category here: The $25 billion estimate provided by the Pentagon Comptroller during budget oversight hearings on Capitol Hill recently has prompted a number of questions about what it covers, why it is lower than estimates like ours generated from public sources, how it relates to the content and timing of a potential emergency supplemental request and the general process for supplemental spending for contingencies. What follows are summary observations on each of these topics. How does the Pentagon build an emergency supplemental request? When a contingency operation commences, the Comptroller assigns a unique cost code to it and directs all components to label associated incremental costs with that code. Once a decision is made that the cost is too much to absorb within the budget without serious disruption to planned programs and activities, the coded costs are collected, evaluated, and documented for potential submission to the Office of Management and Budget (OMB) and the Congress. What is likely included/not included in the $25 billion Comptroller number? The Comptroller indicated the estimate was primarily driven by replacement of expended munitions, which we assume includes interceptors, and is the cost driver in our estimate as well. Additional costs in our estimate that may not yet be included in the official figure are: special pay, movement of capability to the region starting in December, ongoing operation and sustainment costs of ships deployed to the region, and replacement of some damaged or lost equipment. Given other comments from the Department regarding overall posture reviews, the $25 billion estimate also probably does not include a comprehensive repair/rebuild of any damaged facilities and bases in the region. In addition, the Epic Fury estimate would be a subset of any overall supplemental request, which would include a broader capture of contingency costs for Southern Spear and other unbudgeted operations, plus those costs incurred by separate departments and agencies.   How is the increase in the cost of fuel impacting the cost of military operations? Military operations are insulated to a degree from episodic fuel price changes by the Defense Logistics Agency Working Capital Fund (WCF) approach to purchasing fuel. However, when there are major market changes, the standard fuel price charged to defense components by the WCF also changes. For example, in April 2026 the Pentagon Comptroller raised the composite standard price per barrel (which includes all fuel types) by $57.54 from that charged in April 2025 . The unbudgeted bill created by this increase is likely substantial enough that it will be captured as part of the incremental contingency costs for a supplemental request. When are supplementals needed? The timing depends on the ability of the Pentagon to cash flow contingency requirements and the risk—and cost—of doing so to ongoing budgeted work. Unplanned operations are not the only times that the Pentagon will request supplemental funding. Previous supplementals have been needed for natural disasters or other unexpected events. For example, in fiscal year 2024 the supplemental was not dictated by US military operations, but by changing world affairs (the October 7th and Ukraine wars along with an increasingly hostile PRC). The funding went toward responding to the changing world threat environment, funding United States stock replenishment and expanding the Submarine Industrial Base. Does the $1.5 trillion 2027 defense budget request include the Iran conflict costs? No. The 2027 budget request was complete prior to commencement of Operation Epic Fury. Though that budget prioritizes industrial base capacity and accelerated manufacturing of many of the same munitions and interceptors that have been expended during Operation Epic Fury, the Department has said those replacement costs were not part of the budget request. How do we know the true cost of the conflict with Iran? There are many useful ways to measure the cost of conflicts. One approach captures macroeconomic effects like trade disruption from elevated fuel prices and the follow-on effects on consumer prices, such as increased grocery costs. Another might use the original procurement cost of expended munitions and platforms or the care of wounded veterans. Our estimate isolates the incremental costs above the Pentagon’s enacted budget to provide an estimate of what the federal government will need to spend to return the armed forces to pre-conflict readiness. That is the figure most directly relevant to sizing a supplemental request. Estimated costs should also be examined in balance with the benefits they purchase. In the case of Epic Fury, the reduced danger to United States and regional interests accomplished by mitigating the long-time layered Iranian missile , cyber, maritime, proxy, and nuclear threat may well add up to the strategic outcome that makes the operational costs well worth the expense.   The post Estimated Costs of Epic Fury and the Potential Supplemental Request appeared first on American Enterprise Institute - AEI .