【Breaking】Cost of US-Iran Conflict Rises to Approximately $29 Billion: Pentagon Seeks Additional Funding, Hormuz Escort Operations "Paused but Can Be Restarted"

[Breaking News / Follow-up Upgrade] Following yesterday's "Iran-Israel direct mutual attacks escalation, US-Iran peace plan collapse," Washington's financial and military pressure regarding the Iran war has further become public. Defense News / Military Times reported on May 12 that the Pentagon estimates US spending on the Iran war has risen to approximately $29 billion, an increase from the $25 billion disclosed two weeks ago; Acting Under Secretary of Defense for Comptroller Jules Hurst III stated during a congressional hearing that the increase is due to costs associated with equipment maintenance and replacement, ongoing operations in the theater, and does not yet include the costs for repairing damaged military facilities in the Middle East.

Defense Secretary Pete Hegseth, Chairman of the Joint Chiefs of Staff Dan Caine, and Hurst pushed for the annual budget and additional funding requests for the Iran war in Congress on the same day, a significant portion of which will be used to replenish depleted weapon stockpiles. Hegseth denied that US military ammunition is "exhausted," stating that there is still ammunition available for mission requirements; Caine also stated that the various joint combatant commands currently "have enough ammunition," but acknowledged that the military always hopes to have more stockpiles. Combined with previous warnings from Senator Mark Kelly regarding the consumption of munitions such as "Tomahawk, ATACMS, SM-3, THAAD, Patriot," this round of funding pressure indicates that the war has extended from the battlefield to the US military-industrial replenishment and congressional authorization levels.

The Hormuz direction remains the most dangerous trigger point. Defense News reports that despite a nominal ceasefire since April 8, limited exchanges of fire continue between the US and Iran near the Strait of Hormuz: Iran has recently attacked US naval vessels passing through the strait with missiles, drones, and small boats, to which the US responded by striking Iranian military targets. When Hegseth was asked about Project Freedom (a one-day operation where US naval vessels and aircraft briefly escort commercial ships through Hormuz), he stated that the operation is currently in a "paused" state, but "can be restarted at any time if the Commander-in-Chief requires it."

Al Jazeera's military insights and reports from May 6 and 8 provide context for this assessment: the US had initiated escort operations for commercial vessels in Hormuz in early May but paused after progress was made through mediation with parties such as Pakistan; on May 8, exchanges of fire occurred again in the strait, with three US destroyers reportedly attacked while passing through, according to Trump, while the US claimed no damage and inflicted heavy losses on the Iranian attackers. Iran accused the US of first attacking Iranian tankers and coastal targets such as Qeshm Island, Bandar Khamir, and Sirik, followed by Iranian strikes on US naval vessels east of the strait and south of Chabahar. Both sides' accounts of the battle losses contradict each other, but both indicate that the ceasefire is being repeatedly tested by "controlled escalation."

The diplomatic front is also deteriorating. Military Times reported on May 11 that Trump publicly rejected Tehran's latest peace proposal, calling it "garbage," and stated that the ceasefire is in a "life support" state. Defense News further reported that the Iranian Parliament Speaker subsequently warned that Iran is prepared to respond to any acts of aggression with a "lesson-teaching response." This means that after the collapse of the peace plan yesterday, today's escalation points are not just about the failure of negotiations, but also about war costs, additional funding, the option to restart Hormuz escort operations, and limited exchanges of fire all entering the decision-making chain.

HiWars Assessment: The current US-Iran conflict has entered a composite phase of "low-intensity exchanges of fire + high-intensity financial mobilization + fragile negotiation window." The pause of Project Freedom is not a termination but rather positions US naval escort as a lever for escalation that can be restored at any time; if Iran continues to harass US vessels with missiles/drones/small boats, or if the US Congress quickly passes supplemental funding and accelerates ammunition replenishment, the situation in Hormuz may slide again from limited exchanges of fire to systemic maritime control. In the short term, three indicators should be closely monitored: first, whether the US military announces the resumption of escort operations or expands the scope of escort; second, whether Iran translates its "lesson-teaching response" into larger-scale attacks in the strait/gulf; third, whether the congressional supplemental funding provisions include explicit funding for ammunition, base repairs, and regional force maintenance.

Sources Cited

• Defense News / Military Times, 2026-05-12: "Pentagon seeks additional funding as cost of Iran war tops $29 billion."
• Military Times, 2026-05-11: "Trump says war on Iran not ‘done’ — but concerns rise about munitions shortages."
• Al Jazeera, 2026-05-06: "Has the US accepted Iran’s demand to settle Hormuz first, nuclear later?"
• Al Jazeera, 2026-05-08: "US, Iran clash in Hormuz as war escalates: What happened, why it matters."