Estimation of the Costs of U.S. Military Operations in the Middle East: War Expenditures and Regional Impact

List of Key Chapter Titles

1. Abstract
2. Operations Against the Houthis in the Broader Region
3. Context of U.S. Presence in the Broader Middle East and Its Operations in Yemen
4. Cost of U.S. Engagement and Combat with the Houthis (October 1, 2024 to Present)
5. Houthi Actions and Costs Since Operation Rough Rider
6. Long-Term Costs of U.S. Actions Against the Houthis
7. Operation Midnight Hammer (Iran)
8. Context of U.S.-Iran Relations
9. Cost Drivers of Operation Midnight Hammer
10. Cost-Benefit Analysis
11. Broader Regional Linkages with Saudi Arabia
12. Conclusion

Document Introduction

This report is authored by Dr. Linda J. Bilmes of the Harvard Kennedy School and is affiliated with the "Costs of War" project at Brown University's Watson Institute for International and Public Affairs. The report aims to provide a detailed cost estimate for a series of U.S. military operations in the broader Middle East since October 7, 2023, undertaken to support the interests of the United States, Israel, and allies. The study covers the period up to September 2025, with the core objective of quantifying the direct fiscal expenditures of these actions to provide a fact-based budgetary framework for policy discussion.

The report's core estimate indicates that over the two-year period from October 2023 to September 2025, the cost of direct U.S. military operations in the Middle East (primarily targeting the Houthis in Yemen and Iranian nuclear facilities) is estimated to be between $9.65 billion and $12.07 billion. Furthermore, according to a companion report by William D. Hartung, U.S. military aid to Israel during the same period amounts to $21.7 billion. Combined, the total U.S. expenditure related to conflicts in the region during this period ranges from $31.35 billion to $33.77 billion. By comparing with previous estimates released in October 2024, the report reveals a significant increase in spending during Fiscal Year 2025, primarily due to the escalation of military operations.

Methodologically, the report strictly relies on available public data, government statements, military analysis reports, and authoritative media coverage to conduct a line-item breakdown of the costs of major operations. For the primary operations of FY2025—Operation Rough Rider (the bombing campaign against the Houthis) and Operation Midnight Hammer (the strike against Iranian nuclear facilities)—the report constructs detailed cost models respectively. Cost components include munition consumption (e.g., Tomahawk cruise missiles, AGM-158 missiles, GBU-57 Massive Ordnance Penetrators), deployment and operation of major assets (e.g., aircraft carrier strike groups, B-2 stealth bombers), logistical transfers (e.g., cross-theater movement of Patriot air defense systems), asset attrition (e.g., lost F/A-18 Super Hornet aircraft), and the extensive use of missile defense systems (e.g., Patriot and THAAD interceptors). The report clearly distinguishes between low and high estimate ranges to reflect data uncertainty and notes that it does not include indirect costs that are difficult to quantify, such as diplomatic efforts, administrative costs, and soft power impacts.

The report's key findings reveal cost asymmetries and questions regarding strategic effectiveness in U.S. military operations. In the Yemen theater, the U.S. used advanced missiles costing millions of dollars each to intercept Houthi drones costing only thousands of dollars, highlighting cost-effectiveness challenges. Despite its scale, Operation Rough Rider failed to durably curb Houthi attacks on international shipping, and its effectiveness in achieving the strategic goal of "significantly degrading Houthi capabilities" is questioned by experts. In the Iran theater, Operation Midnight Hammer employed the Massive Ordnance Penetrator, which took 15 years to develop, along with B-2 bombers, causing severe damage to Iranian nuclear facilities. However, a U.S. Defense Intelligence Agency assessment concluded it only set back Iran's nuclear program by several months. The operation also consumed approximately one-quarter of the U.S. THAAD system's interceptor inventory, exposing a potential gap in high-end defensive munition stockpiles.

Finally, the report examines direct military costs within the broader context of regional strategy and long-term burdens. It notes that the massive U.S.-Saudi Arabia defense cooperation agreement may stimulate a regional arms race and pose long-term risks. More importantly, the report emphasizes that current direct war expenditures are merely the tip of the iceberg; the future reconstruction of the Gaza Strip is projected to require at least $53 billion, of which the U.S. is likely to bear a major share. The report's conclusion reiterates that the American public has a right to understand how funds are used in conflicts, and that when evaluating military actions, their enormous fiscal costs should be weighed against the effectiveness in achieving the goal of promoting regional peace.