Tehran is experiencing a noteworthy shift in its geopolitical landscape, thanks in large part to a recent memorandum of understanding that grants Iran substantial short-term financial relief. This agreement comes without demanding immediate concessions surrounding its nuclear and missile initiatives. Notably, Iran’s compliance mainly revolves around maintaining open traffic through the vital Strait of Hormuz, where Tehran is even exploring innovative ways to impose tolls. However, this newfound advantage also reveals a significant transformation: Iran is now less reliant on proxy forces like Hezbollah for intimidation and deterrence.
Changing Dynamics of Iran’s Strategy
While proxy forces still play a role for Iran, they have shifted from being the foundation of its deterrent strategy. Iran is learning how to exploit threats to global energy markets, which can exert pressure on the United States more effectively than traditional proxy warfare methods, such as militia attacks or rocket fire. This evolution in strategy doesn’t render groups like Hezbollah, Hamas, or the Houthis obsolete; rather, they have transitioned into components of a greater coercive strategy rather than being the central pillar of Iran’s defense posture. Tehran is now positioned to provide aid to these groups rather than relying on them solely for defense.
Prior to the surprise attack by Hamas on October 7, 2023, Iran frequently turned to its regional proxies to deter adversaries. When threatened by the United States and Israel, Hezbollah’s substantial arsenal of over 100,000 rockets was seen as capable of inflicting serious harm on Israel. At this juncture, groups like Hamas were also expected to play a significant role in any conflict, maintaining Iran’s credibility as a regional power through costly reprisals against its enemies.
Impact of Recent Conflicts
The balance of power significantly shifted post-October 7. Although Hamas remains an active player, its military capabilities took a hit during its confrontations with Israel, leading to a weakened status. This decline has been exacerbated by Israel’s intensive 2024 military campaign, which resulted in extensive casualties among Hezbollah fighters and the deterioration of its missile inventory from an estimated 150,000 rockets to fewer than 25,000. Consequently, when Israel and the United States eventually took military action against Iran in 2026, Hezbollah displayed a noticeably restrained response, opting to launch a limited number of attacks instead of unleashing its full arsenal.
Despite the continued presence of proxies within Iran’s strategy, they have proven ineffective in deterring more formidable threats from the U.S. and Israel. In fact, Israeli authorities began attributing responsibility for the October 7 attacks directly to Iran, signaling a paradigm shift. This change in rhetoric suggests that if proxies are involved in conflicts, it could justify more decisive action against Iran itself.
The Future of Proxies in Iran’s Strategy
Looking ahead, Iran may need to allocate scarce military and financial resources to revive its proxy operations, particularly in Lebanon. After Hezbollah’s setbacks, Iran has provided resources to help rebuild and restructure its military capabilities. However, any dependency on proxies could divert critical funding from domestic needs, especially at a time when Iran is navigating through economic sanctions.
Iran has adeptly leveraged its influence over global energy markets, especially through its control over the Strait of Hormuz. This strategy has allowed Iran to raise global oil prices and counterbalance the coercive financial measures imposed by the U.S. Furthermore, Tehran is willing to employ military actions against U.S. allies in the Gulf, compelling some states to negotiate for protection for their maritime routes.
Ultimately, the paradox facing Iran is that while it once depended heavily on proxies for influence and deterrence at a low cost, these same groups now present a double-edged sword. Although they threaten the U.S., Israel, and allied nations, they no longer provide the level of security Iran once expected. The current geopolitical climate poses new challenges for Tehran, as its previous strategies of leverage through proxy warfare evolve into complex obligations that require ongoing financial and military support without guaranteeing the security they were designed to provide.