For decades, Iran cultivated a network of proxy militias, leveraging Shia identity politics to exert influence in Lebanon, Iraq, Syria, and Yemen. Groups including Hezbollah and the Houthis have been central to Iran’s regional strategy. Hence, since 1979, the Iranian regime has painted itself as the guardian of Shia Islam and the champion of oppressed Muslims, rallying support for its cause under the banner of resistance against Israel and supposed Western imperialism.
The Rise of Iran’s Proxy Network
The roots of Iran’s proxy strategy trace back to the aftermath of the 1979 Islamic Revolution. Historically, wealth and political power in the Arab world were concentrated in the hands of Sunnis, while Shias were sidelined. It was the Shia community’s experience of being marginalized that oriented them toward revolutionary ideologies and movements that challenged the status quo. The founder of the Islamic Republic, Grand Ayatollah Ruhollah Khomeini, implemented his vision of exporting Iran’s revolutionary ideals beyond its borders by supporting and arming Shia militias across the Middle East. Additionally, Iran began championing the Palestinian cause as a way to win the hearts and minds of the region’s Sunni Muslims. In Lebanon, Hezbollah became Iran’s crown jewel, transforming itself from a resistance movement against Israeli occupation into a political and military force that could project its power beyond Lebanon’s borders. In Iraq, Iran cultivated alliances with various Shia militias, capitalizing on the chaos following the U.S.-led invasion in 2003. More recently, in Yemen, the Houthis emerged as another Iranian-backed force, successfully weathering a brutal air campaign led by Saudi Arabia.
Furthermore, Iran’s proxies acted as buffers against potential threats. Hezbollah deterred Israel in Lebanon, Iraqi militias provided influence over Baghdad’s politics, and the Houthis weakened Saudi Arabia’s influence in Yemen and provided implicit leverage for Iran as it dealt with its Gulf neighbors. The Islamic Revolutionary Guard Corps was central in coordinating and managing these proxy forces, ensuring loyalty and operational efficiency.
This network was not merely about military strength; it was also about ideology. Iran presented itself as the leader of the “axis of resistance” against Israel and the United States. For decades, the Iranian revolutionary agenda focused on investing billions in training, arming, and financing these proxy groups, creating a network that could challenge regional powers and expand Tehran’s sphere of influence. However, in the view of many analysts, the Iranian revolutionary agenda is now over.
The Gaza War: A Turning Point
The recent Gaza war has had a dominant Palestinian narrative, but it has also been viewed through the lens of “axis of resistance” dynamics. The war has reshaped the broader geopolitical dynamics of the Middle East in profound ways. While Israel adopted an increasingly aggressive stance in its military campaigns and objectives, Iran hesitated to fully engage in the conflict or activate its proxies to their full potential, allowing Israel an escalatory advantage it used to inflict significant damage on Hezbollah and Iran itself. These attacks significantly reduced any deterrence Iran had against Israel, and they have left the Iranian regime vulnerable, especially considering Israel’s current posture in the region.
This cautious approach, as it played out in Gaza, stands in stark contrast to Iran’s historical rhetoric of unwavering support for a Palestinian state. For years, Iran had positioned itself as the primary patron of the Palestinian cause, but when the moment came to demonstrate that commitment, Iran chose to refrain from confrontation. This passivity was not lost on observers, especially among Sunni governments and populations who had been skeptical of Iranian ambitions.
The Gaza war also revealed a disconnect between the proxy network and Iran. Iran had been working to surround Israel in a coordinated “unity of fronts” built from its proxy network. While Hezbollah, the Houthis, and Iraqi militias demonstrated a willingness to act based on the “unity of fronts” concept of the “axis of resistance,” their efforts were largely symbolic and lacked Tehran’s full backing.
Iran Distances Itself From Its Proxies
Despite decades of investment and rhetorical commitment to the “axis of resistance,” Iran has begun to distance itself from its proxy groups. In a statement, Iranian Supreme Leader Ayatollah Ali Khamenei declared that Iran “does not have a proxy force” and that the Iranians “do not need a proxy force” to act in the region. This may be the usual Iranian double-speak regarding its proxy network, however, the timing of this statement reinforces perceptions that the recent setbacks Iran has suffered are forcing the regime to rethink the value and potential liabilities of its network of proxies.
This shift in focus by Iran has caused significant frustration and disillusionment among the axis members. Feeling abandoned, these groups may, in turn, begin distancing themselves from Iran, although it’s not clear how much agency and what options they will have. North Korea assisted in building Hezbollah’s vast tunnel system. The Korea Mining Development Trading Corporation signed a $13 million deal with Hezbollah for the supply of engineering materials for excavating tunnels and, in addition, for the transfer of North Korean engineering technology to Hezbollah’s Jihad Construction Foundation. It remains to be seen, given Hezbollah’s current dilemma, the extent to which North Korea might seek to expand that relationship. And while there is no research indicating direct North Korean weapons shipments to the Houthis, North Korea has exported weapons to Yemen, despite heavy U.S. and United Nations sanctions, and North Korean missiles have been identified among those used in Houthi attacks on Saudi Arabia.
Nuclear Negotiations Over Regional Alliances
Making a virtue of the severe pressure Israel has put it and its proxies under, Tehran seems to be prioritizing its nuclear program, and the possibility of negotiating with Western powers, over maintaining its proxy network. According to analysts, under Foreign Minister Abbas Araghchi, the Iranian Foreign Ministry is likely to have a fair amount of flexibility for conducting talks, perhaps even more leeway than under the administration of former President Hassan Rouhani, who often clashed with Iranian hard-liners. That Araghchi is already discussing amending the Joint Comprehensive Plan of Action nuclear deal and initiating new negotiations likely indicates approval from higher-level officials. It also reflects the weakened strategic hand Tehran has to play.
However, this posture, even if forced upon Iran by circumstances, carries significant risks. As Iran’s proxy network is unraveling, Tehran is losing its primary source of leverage in the region. Israel and the United States, in particular, are likely to find themselves in a position to exploit Iran’s weakened position to pursue their strategic objectives. President Donald J. Trump is taking office determined to get tough on Iran, just as his first administration had, and his incoming team has promised to ratchet up economic pressure and refused to take military action against Iran’s nuclear capability off the table.
Meanwhile, domestically, the religious establishment in Iran has antagonized both the reformists and now the conservatives, igniting a significant problem within the regime itself that could degrade its support within the country even more. The former United Kingdom security minister, Tom Tugendhat, said there is a crisis unfolding inside the IRGC due to the loss of Syria and predicted the Iranian regime would collapse in a few years. He said, “Young members of the IRGC are saying two things. One, the old guard are corrupt and incompetent. That’s why Hezbollah has been hung out to dry and defeated. That’s why old allies like Assad have fallen … The second thing they’re saying is that they’re hearing rumors … that the ayatollah, and the government in Tehran, wants to talk to the Americans to try and find a way out of this and perhaps hang on.” Thus, with a combination of external and now building internal pressure, the Iranian regime’s regional miscalculations have put the country in perhaps the most precarious situation since the Iran-Iraq War.
Iran’s Strategic Miscalculations
The trajectory of Iran’s regional strategy since 1979 seems to have reached a critical crossroads. Once seen as a rising power capable of uniting Muslims under a shared cause, Iran finds itself increasingly isolated. Its actions – and hesitations – during the Gaza war have damaged its credibility among both Sunni and Shia populations. And the lightning offensive that led to the rapid collapse of the Assad regime has further undermined Iran’s proxy network and its reputation for decisive, effective military action.
Tehran’s failure to deliver on its promises and its prioritization of self-preservation over solidarity, while understandable as state realpolitik and regime survival calculations, have further eroded its standing in the wider Middle East. In many ways, Iran’s current dilemma is a culmination of a pivotal year of setbacks and miscalculations.
Iran may believe it is playing a sophisticated geopolitical game, but the reality is far less flattering. The “axis of resistance” that Tehran built is crumbling. And without the trust and loyalty of its proxy groups, Iran’s regional influence will continue to wane.
