In southern Lebanon, portraits of Iranian leaders still hang at the entrances to Shiite villages like political icons of the old Middle East: Tehran above, Hezbollah on the front line, Israel in the crosshairs, and America forced to count missiles, routes, oil tankers, and possible funerals. For almost four decades, that picture seemed nearly immutable. But after October 7, 2023, the war in Gaza, the destruction of Iran’s Syrian route, the killing of Hassan Nasrallah, the collapse of Bashar al Assad’s regime, and the new direct American Iranian war, it began to crack from within.
The central question is no longer whether Hezbollah remains strong. It does. Nor is it whether Hezbollah is dangerous to Israel. It is. Nor even whether Iran will continue pouring money, missiles, instructors, logistics, and political protection into it. It will. The real question is different: is Hezbollah still a strategic asset for Iran, or is it already turning into a geopolitical liability that Tehran must rescue at the cost of negotiations with the United States, risks in the Strait of Hormuz, and new blows to regional stability?
This is the logic at the core of Daniel Byman’s original argument: Iran’s proxy network has not disappeared, but its function has changed radically. It is no longer Tehran’s main shield. It has become part of a broader system of pressure in which the main lever is no longer southern Lebanon, but the world’s energy artery: the Strait of Hormuz.
Until recently, Iran’s strategy rested on an elegant and brutal formula: do not fight directly, but surround the enemy with a ring of armed clients. Hezbollah in Lebanon, Hamas and Islamic Jihad in the Palestinian arena, Shiite militias in Iraq, the Houthis in Yemen, and Syrian territory as a supply corridor all of this was called the “axis of resistance.” In reality, it was a distributed system of strategic blackmail.
Israel could strike Iran, but it had to expect a rain of missiles from Lebanon. The United States could tighten sanctions, but it had to remember its bases in the Gulf, maritime traffic, oil infrastructure, and the vulnerability of its allies. For a country with a weak economy, limited airpower, and technologically outdated conventional forces, this was an almost ideal model of asymmetric power.
Now that model has not collapsed, but it has degraded. And that is more dangerous than a simple collapse.
The Old Formula: Cheap, Distant, Plausibly Deniable
Iran’s proxy architecture was not born as romantic ideology. It was a cold response to strategic weakness. After the 1979 revolution, Tehran found itself isolated, then trapped in a devastating war with Iraq, then placed under sanctions, and then confronted by an American military presence stretching from the Persian Gulf to Afghanistan. Its army was constrained, its economy depended on oil, and its state ideology demanded the export of influence. The answer was not aircraft carriers or expeditionary corps. It was armed networks.
Hezbollah became the crown jewel of that system. It was not merely a Lebanese organization, but the most successful foreign policy project of the Islamic Revolutionary Guard Corps. It had a local social base, political representation, combat experience, its own intelligence, media, financial infrastructure, and an arsenal that, according to various estimates before the last major war, included between 100,000 and 150,000 rockets and guided munitions.
For Iran, this meant strategic depth without an official war. For Israel, it meant the threat that civilian infrastructure could be hit if Iranian territory were attacked.
In this logic, Hezbollah was not an auxiliary instrument, but a central component of deterrence. It was Iran’s Lebanese army, but without the Iranian flag. If Israel attacked Iran’s nuclear facilities, Hezbollah could respond against Haifa, Tel Aviv, military bases, and industrial sites. If the United States increased pressure, Iraqi militias could strike American facilities. If the West spoke of a maritime blockade, the Houthis could raise the cost of shipping in the Red Sea. All of this allowed Tehran to threaten without always accepting direct responsibility.
This model worked for decades. Its bloody traces were visible as early as the 1980s. In 1983, a series of attacks in Kuwait was linked to pro Iranian Shiite structures and viewed as punishment for Kuwait’s support of Iraq in the Iran Iraq War. In 1996, the bombing of the Khobar Towers complex in Saudi Arabia killed 19 American service members and wounded hundreds of people; Washington linked the case to pro Iranian Saudi Shiite militants.
That is how Tehran mastered the central art of weak states: inflicting pain on powerful adversaries through other people’s hands.
October 7 Did Not Break Israel. It Broke the Old Caution
The Hamas attack of October 7, 2023, was supposed, according to the logic of the axis of resistance, to shift the balance in favor of Iran and its allies. In the first weeks, it seemed that Israel had been dragged onto several fronts and that the United States was again forced to put out a regional fire. But the strategic effect turned out to be the opposite. Israel drew a conclusion that became catastrophic for Tehran: if proxies are already attacking, if deterrence is not working, if the price of passivity is higher than the price of escalation, then it is possible to strike not only the executors, but also the architects.
This is where the main psychological rupture occurred. Before 2023, Iranian proxies forced Israel to act cautiously. After 2023, they became an argument for expanding the war. What had once been Iran’s insurance policy became an indictment against it.
In 2024, Israel carried out a series of strikes against Hezbollah that altered the organization’s internal structure. Hassan Nasrallah, several senior commanders, and political and military officials were killed, while the organization itself lost a significant part of its experienced command layer. Analysts at INSS wrote that the new leader, Naim Qassem, lacked Nasrallah’s authority and qualities, while the absence of the old guard complicated decision making inside the organization.
Even by the most cautious estimates, Hezbollah’s military potential is no longer what it was. Before the war, its arsenal was often estimated at 120,000 to 200,000 rockets and projectiles. In 2026, some estimates put the number at roughly 25,000 rockets, mostly short and medium range. Even if these figures are disputed, the direction of change is clear: Hezbollah has retained the ability to inflict damage, but it has lost the image of an almost inexhaustible missile monster capable of paralyzing Israel for months.
This does not mean that Israel has defeated Hezbollah once and for all. In the Middle East, organizations of this kind rarely disappear after defeat. They go underground, rebuild channels, replace commanders, hide arsenals, restore social networks, and wait for the enemy to tire. But from Iran’s point of view, something else matters: Hezbollah has stopped being a reliable guarantee of Tehran’s immunity.
The Syrian Catastrophe: Iran Lost Not an Ally, but a Military Corridor
The fall of Bashar al Assad’s regime in December 2024 was a blow to Iran not only politically, but also infrastructurally. Syria was not merely a partner. It was a warehouse, a transit zone, strategic depth, a bridge to Lebanon, and a platform for pressure on Israel. For decades, supplies to Hezbollah passed through Syrian territory, Iranian advisers were deployed there, and networks of the Islamic Revolutionary Guard Corps operated there.
After the rise of the new government led by Ahmed al Sharaa, that architecture was severed. The Council on Foreign Relations described Assad’s fall as a sharp change in Syria’s balance after October 7, while Radio Free Europe and Radio Liberty stated directly that Iran had lost a key Mediterranean base and a supply route to Hezbollah.
This changed the entire calculation. Previously, Iran could rebuild Hezbollah through the Syrian artery. Now any major flow of weapons becomes more complicated, more expensive, and more visible. The new Syrian authorities, hostile to the Iranian legacy because of Tehran’s support for Assad, have no interest in reviving the old corridor. For Hezbollah, this means strategic compression. For Iran, it means a rising cost for every rocket depot in Lebanon.
This is the essence of Tehran’s new dilemma. Hezbollah used to be an investment asset: Iran put in missiles and received deterrence in return. Now it increasingly resembles a debt position: Tehran must keep investing again and again, while the return keeps falling.
The New Formula of Pressure: Not Missiles Against Israel, but Fear at the Gas Pump
The most important conclusion of recent months is that Iran has found a faster instrument for influencing the United States than Lebanese missiles. That instrument is the Strait of Hormuz.
A vital share of the world’s oil and gas flows through Hormuz. Any disruption in this narrow maritime chokepoint is immediately reflected in energy prices, insurance rates, freight costs, market behavior, and political pressure on Washington. If Hezbollah strikes Israel, an American voter may see it as a distant war. If Iran raises the price of gasoline, the war enters an American’s life through the receipt at the gas station. For President Trump’s administration, this is no longer a Middle Eastern abstraction. It is a domestic political problem.
That is why the temporary 60 day United States authorization for transactions involving Iranian oil became more than a technical easing measure. It was an acknowledgment of a new reality. Reuters reported that on June 22, 2026, Washington issued a temporary general license allowing the sale, delivery, and import of Iranian crude oil, petroleum products, and derivatives, including related banking, insurance, transportation services, and dollar denominated transactions. This was tied to negotiations and commitments concerning transit through Hormuz and International Atomic Energy Agency inspections.
In other words, Iran received what it had sought for decades through its sanctions struggle: financial breathing room without immediate capitulation on its nuclear and missile programs. Not because Hezbollah was ready to open a northern front, but because Hormuz proved stronger than Lebanon.
The Strait Instead of Proxies: How Tehran Changed the Language of Blackmail
The events of June 20 to 26, 2026, showed how quickly Iran had learned to translate a regional war into global economic anxiety. On June 20, Tehran announced the closure of the Strait of Hormuz, linking the move to Israeli attacks on Lebanon and American inaction. By June 25, Iran had rejected a United Nations backed plan to move vessels out of the danger zone and was effectively insisting on its own control over transit. On June 26, the United States struck Iranian targets after an attack on a commercial vessel near the strait.
What matters here is not only the confrontation itself, but its political mechanics. Iran demonstrated that Hezbollah’s fate in Lebanon could be tied to the security of global shipping. If Israel continues to pressure Hezbollah, Iran creates a crisis in Hormuz. If the United States wants calm on the energy market, it must pressure not only Tehran, but also Israel. If the Gulf states do not want strikes on ports, airports, hotels, energy facilities, and military bases, they must persuade Washington not to push matters toward a new war.
This is no longer a classic proxy war. It is coercion through the systemic vulnerabilities of the global economy.
That is precisely why Hezbollah has become not only an instrument for Iran, but also a pretext. Tehran is no longer merely hiding behind its Lebanese ally. It is using Hezbollah as a political justification for pressuring the United States: stop Israel, or Hormuz will once again become everyone’s problem.
Why Hezbollah Did Not Go All In
The most unpleasant episode of the new war for Tehran was that when Iran itself came under direct attack by the United States and Israel, the proxy network did not function as the old strategic nightmare. Hezbollah launched rockets and drones, but did not move into total war. It did not use its entire remaining arsenal, did not launch a full scale invasion, and did not try to paralyze Israel at any cost. The Houthis limited themselves to symbolic strikes. Iraqi groups acted more cautiously than many supporters of the “Iranian remote control” theory had expected.
This does not necessarily mean betrayal. Rather, it shows the autonomy and rationality of proxy actors. Hezbollah has its Lebanese environment, damaged infrastructure, a vulnerable Shiite base, political opponents inside Lebanon, and the fear of losing once and for all what remained after 2024. Iraqi factions have businesses, ministerial ties, positions inside state structures, and an interest in not turning Iraq into a battlefield for a direct American Iranian war. The Houthis have their own Yemeni logic. They depend on Iran, but they are not automatic buttons.
This autonomy had always existed, but now it has become strategically painful for Tehran. Proxies can raise the cost of war, but they are not obliged to die in order to save the Iranian regime. They receive money, weapons, and political legitimacy from Iran, but at a moment of direct danger to Tehran, they also calculate their own survival.
That is why the old phrase “Iranian proxies” has become too simplistic. These are not puppets. They are clients, allies, partners, sometimes vassals, sometimes autonomous players. They can be guided, but they cannot be fully programmed.
Iran After Ali Khamenei: A New Leadership and an Old Empire of Networks
The additional complication is that Iran is experiencing not only a foreign policy crisis, but also an internal transition. After the death of Ali Khamenei and the transfer of supreme authority to Mojtaba Khamenei, the Iranian system entered an unusual condition: formal continuity was preserved, but legitimacy and the balance among clerical authority, the president, parliamentary conservatives, and the Islamic Revolutionary Guard Corps became more fragile. Al Jazeera and The Guardian reported that Mojtaba Khamenei had been named the new supreme leader in March 2026 after his father’s death.
For the new leadership, abandoning Hezbollah would be almost ideological suicide. For decades, Iran’s revolutionary system explained to its own society and to its allies that it does not abandon the axis of resistance. If Tehran now allows Israel to finish off Hezbollah, that message will be heard not only in Beirut. It will be heard in Sanaa, Baghdad, Gaza, Damascus, and inside the Islamic Revolutionary Guard Corps itself. The loyalty of networks rests not only on money, but also on the conviction that the patron will not disappear at the critical moment.
That is why Iran is forced to defend Hezbollah even when doing so is economically and diplomatically disadvantageous. It may need sanctions relief, an inflow of money, the restoration of oil flows, and internal stabilization. But if the price of those benefits is the public abandonment of Hezbollah under Israeli strikes, Tehran risks losing not just an ally, but its reputation as the center of the entire regional network.
That is how an asset turns into a liability: it can no longer be abandoned, even if it has stopped delivering the same strategic profit.
The Israeli Dilemma: Finish the Job, but Do Not Stop
For Israel, the new situation is not a simple victory either. On the one hand, Hezbollah has been weakened, its command layer has been damaged, Iran’s Syrian corridor has been destroyed, and the old fear of the northern front has been partly overcome. On the other hand, every new Israeli attack on Lebanon can now become not only a local operation, but also a trigger for an American Iranian crisis.
Israel wants to consolidate its military result: prevent Hezbollah from recovering, block Iran from restoring logistics, and stop a new missile buildup along the northern border. But President Trump’s administration is looking at the broader picture: it needs a regional framework for deescalation, control over Hormuz, lower price risks, a negotiating process with Iran, and manageable allies. Reuters wrote that the temporary American Iranian deal weakened Benjamin Netanyahu’s position because Washington began pushing a Middle Eastern settlement without fully accommodating Israeli objections.
In this conflict of interests, Israel risks becoming not so much America’s main ally as a source of instability for an American deal. That is a dramatic turn. For years, Netanyahu convinced Washington that Iran was the central threat. Now Washington sees that Israel’s continued war against Hezbollah could derail negotiations, blow up Hormuz again, and raise the price of oil.
For Iran, this is an opportunity. It can present itself not as the aggressor, but as a side forced to respond for the sake of Lebanon, balance, and “justice.” Cynical, but effective.
The Economy of the New War: A Rocket Is Cheaper, but the Strait Is More Profitable
Proxy war was attractive to Iran because it was relatively cheap. Maintaining an armed network costs less than building modern airpower, carrier strike groups, or a full system of global power projection. But that cheapness made sense as long as proxies created deterrence. If they require constant restoration, compensation for losses, political cover, and diplomatic bargaining, their cost rises.
Hormuz works differently. There is no need to launch thousands of rockets. A threat is enough, along with a few incidents, mine uncertainty, drone attacks, disputes over routes, and insurance risks. The world market does the rest. The price of oil, the cost of insurance, tanker delays, anxiety in the Gulf states, and pressure on Washington produce an effect that Hezbollah can no longer guarantee quickly and reliably.
But this strategy is dangerous for Iran itself. Hormuz is a weapon that strikes everyone, including partners, buyers, and neighbors. China, India, the Gulf states, and even potential mediators have no interest in the permanent militarization of the strait. If Tehran reaches for this lever too often, it could turn a temporary advantage into a long term coalition against itself.
And yet, in the short term, Iran sees the result: the United States is talking, sanctions pressure is partially easing, the Gulf states are nervous, Israel is facing constraints, and Hezbollah gets a chance to catch its breath.
Three Scenarios: Recovery, Freeze, or a New Explosion
The first scenario is controlled recovery. In this version, the United States continues to pressure Israel, Lebanon receives a fragile ceasefire, Hezbollah does not disarm but reduces its activity, and Iran gradually restores part of its capabilities through more covert and more expensive channels. This is the most likely scenario if the American Iranian deal holds.
The second scenario is a strategic freeze. Hezbollah remains powerful inside Lebanon, but it never returns to its former level of regional deterrence. It becomes a defensive force for the Shiite arena, not Iran’s main external sword. Tehran shifts its primary levers of pressure to Hormuz, the Gulf, cyberspace, the missile program, and direct diplomacy with Washington. This is the most rational scenario for Iran, but it requires a discipline that revolutionary systems often lack.
The third scenario is a new escalation. Israel decides that the window of opportunity against Hezbollah is unique and cannot be missed. The strikes continue, Tehran uses Hormuz again, the United States responds, the Gulf states are pulled into the crisis, and the axis of resistance tries to prove that it is still alive. In that case, the Middle East enters a new type of war: not a large classical war between armies, but a series of connected crises in which Lebanon, Hormuz, Iraq, Yemen, oil, sanctions, and American domestic elections become parts of one mechanism.
The Victor’s Paradox: Iran Became Stronger Precisely Because Its Network Weakened
The strangest result of recent years is that the weakening of Iran’s proxies has not necessarily weakened Iran in the short term. It forced Tehran to search for other levers, and it found a more direct way to speak to Washington. Iran used to speak through Hezbollah. Now it speaks through Hormuz. It used to threaten Israel with the northern front. Now it threatens the global economy with a nervous breakdown.
But in the long term, this is a dangerous victory. The proxy network was valuable because it distributed risk. Hormuz concentrates risk on Iran itself. If Hezbollah made a mistake, Tehran could distance itself. If Iran blocks the strait or attacks shipping, there is no longer any distance. There is a direct trace, a direct address, and a direct risk of retaliation.
That is why Hezbollah today is not a dead asset, but a transformed one. Iran still needs it for Lebanon, for pressure on Israel, for the image of the axis of resistance, and for its connection to the Shiite region. But Hezbollah no longer performs the main function for which it was built over decades: it no longer guarantees Iran’s own security.
The End of the Old Axis of Resistance
The Middle East has entered a phase in which old names remain, but their substance is changing. The axis of resistance still exists, but no longer as a single iron front. Hezbollah still exists, but no longer as Tehran’s untouchable strategic sword. Iranian power still exists, but it is now increasingly expressed not through Lebanese rockets, but through the ability to disrupt the bloodstream of the global energy system.
This does not make the region safer. On the contrary, the old system was brutal, but understandable. The new system is more nervous, more hybrid, and more unpredictable. In it, one strike on southern Lebanon can echo in Hormuz. One tanker can become an argument in nuclear negotiations. One Lebanese commander can cost billions of dollars on the oil market. One miscalculation by Israel or Iran can wreck a deal that Washington is trying to sell as the end of the war.
The main conclusion is simple and alarming: Iran no longer depends on Hezbollah the way it once did. But it cannot abandon Hezbollah either. That is Tehran’s trap. It has outgrown its own proxy mechanism, but it remains captive to that mechanism’s symbolism, debts, and old promises.
Hezbollah once protected Iran from war. Now Iran is protecting Hezbollah from defeat. And it is in that reversal that the true thunder of the new Middle East can be heard.