$38 billion and counting: Trump’s Iran war becomes a US election issue as India watches Hormuz

How much can a war cost before the bill itself becomes a political problem?

For Donald Trump, that question is becoming harder to avoid. The US war with Iran has already cost the Pentagon more than $38 billion through August 1, according to a new Congressional Budget Office assessment. If the fighting continues at its current intensity, the cost could rise by another $2 billion to $3 billion every month.

And there is another number Washington is watching: 0.5 percentage points. That is how much the CBO estimates the war could add to US inflation in the first quarter of 2027, largely because of disruptions to oil and natural-gas shipments.

With America's November midterm elections approaching, the Iran war is therefore becoming about more than missiles and military strategy. It is increasingly about money, prices and what voters think Washington should be spending their money on.

But thousands of kilometres away, India has another reason to be watching the conflict: the Strait of Hormuz.

Why has Trump’s Iran war suddenly become a US election issue?

The timing is difficult for the Trump administration. The CBO's assessment arrives as American voters prepare to decide control of Congress in the November midterms. The report puts a concrete price on a conflict that has already lasted months, while warning that the costs will continue if fighting persists. India Today reported that the CBO estimate is based largely on munitions, lost equipment, flying hours and fuel, and does not include several longer-term costs such as healthcare and disability benefits for military personnel.

The political debate is therefore shifting from “Is the war necessary?” to another question: “How much is it costing?”

Democrats have seized on the CBO figures to criticise the administration's Iran policy, while Trump and his administration continue to defend the military operation as necessary for US national security. The Pentagon disputes some concerns about ammunition shortages raised in recent assessments.

What does $38 billion actually pay for?

It is not simply the cost of firing missiles. The CBO says the bulk of the estimated $38 billion relates to replacing munitions and equipment lost during the conflict, alongside increased flying hours, fuel and other operational expenses. It estimates that replacing munitions used through August 1 could cost about $21.7 billion, while replacing lost equipment could require another $1.9 billion.

A Pentagon inspector general assessment released separately put the war's cost through late June at about $33.4 billion and reported “strategic inventory shortfalls” in some munitions. The CBO also warned that replenishing some missile-defence inventories could take years.

The Pentagon, however, has pushed back against claims that the US military is unable to meet its operational requirements. That disagreement is important: the cost estimates are documented, but the broader assessment of America's military readiness remains contested.

Why is India watching the Strait of Hormuz?

Now comes the part that makes this a global story rather than simply a Washington fight.

The Strait of Hormuz is one of the world's most important energy chokepoints. Reuters reported on Wednesday that only four vessels crossed the waterway on Tuesday, compared with a 10-day average of 18, amid intensified fighting. The strait normally handles roughly one-fifth of global oil and liquefied natural gas shipments.

For India, that matters because disruptions to Middle Eastern energy supplies can quickly translate into higher import costs. India's crude oil import bill reportedly jumped in August, with crude imports rising 25.8% year-on-year to $16.69 billion, while India's crude basket averaged $90.19 a barrel.

The Times of India has also highlighted a wider squeeze facing Indian refiners, with disruptions involving Middle Eastern supplies coming alongside tighter Russian oil availability and stronger Chinese competition for crude.

What happens if Hormuz remains disrupted?

This is where an American war begins to show up in Indian economic calculations.

A prolonged disruption can push up freight, insurance and energy costs even when India manages to diversify where it buys crude. The pressure is particularly important for LPG, because India has historically depended heavily on seaborne supplies from the Gulf.

India has already responded to earlier disruptions by seeking alternative supplies and increasing domestic LPG production. Reuters has reported that Indian refiners have turned to Latin American and African crude when Middle Eastern supplies were disrupted.

The latest Reuters data showing sharply reduced vessel traffic through Hormuz nevertheless underlines how fragile the route remains.

Why does the US political fight matter to India?

Because the two stories are connected by the same chokepoint.

In Washington, the argument is increasingly about how long America can afford to fight and what the war is doing to US taxpayers, inflation and military inventories. In New Delhi, the concern is more immediate: what happens to energy supplies and prices if the conflict keeps disrupting one of the world's busiest oil routes?

That is why the latest US debate over Iran is not just another Washington political fight.

Every additional month of conflict carries a bill for the United States. And every additional disruption around Hormuz can send another bill down the global energy supply chain — eventually reaching countries such as India.

For Trump, the first bill is increasingly a political one. For India, the second could arrive in the form of oil, gas and shipping costs.

(With inputs from ANI)