Here's Why Iran Is Losing Its Influence
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I'm Stephen Carroll and this is Here's Why, where we take one news story and explain it in just a few minutes with our experts here at Bloomberg. The toppling of Bashar al-Assad's regime in Syria is yet another seismic shift in a region that's seen repeated major upheaval in the past year. The collapse of the Assad regime, the tyranny in Damascus offers great opportunity

but also is fraught with significant danger. We have to see this as an opportunity for the future of Syria. That's a future without the terrorism and violence we've seen far too much of in this brutal regime. It's a moment of historic opportunity for the long-suffering people of Syria.

to build a better future for their proud country. It's also a moment of risk and uncertainty. Assad's regime was a key ally for Iran in the Middle East. Hamas and Hezbollah, other groups supported by Tehran, are also weakened after more than a year of conflict with Israel. So here's why Iran is losing its influence.

Golnar Motavali, who leads our coverage of Iran here at Bloomberg, joins me now for more. Golnar, just to put this in context for us, how important was the Assad regime to Iran? If you think of Iran's network of proxies, or what it calls itself the axis of resistance, and what we tend to refer to using our language as the network of proxies and allies, you

You can look at Syria and Hamas and Hezbollah as some kind of triangle in the Levant, in the eastern Mediterranean. And then you can also add the Houthis or Ansarullah in Yemen. That group is very important because it...

It provides Iran with some influence on the Arabian Peninsula. So it gives a way of exerting pressure, not just on Saudi when it needs to, when it feels it needs to, but obviously on an incredibly key shipping route that goes to the Red Sea directly towards the Suez Canal, but more broadly on the Persian Gulf.

If you think of those three pillars, Hezbollah, Syria, Hamas, it really had the Levant area covered, especially when you think about the way that Iran's enmity and opposition to the state of Israel since the foundation of the Islamic Republic

Republic has been so defining of its foreign policy and even of its identity. So to that extent, that cluster of allies in the Levant were very important in terms of challenging not just Israel, but obviously US influence as well. So what does Iran do now then? If its, I suppose its centres of influence have been weakened, these three ones now, how can it respond to this?

It's very interesting because when you look at it on the face of it, we've had the effective defenestration of all these groups. You know, their leaders have been killed with the exception of Assad. He's just run away. So

It feels and it looks like their regional policy, which was such a cornerstone of their foreign policy. And as I said, the overall political identity of the Islamic Republic is in tatters. It's kind of in disarray. It's on its knees. You know, it's struggling.

mostly because of the extent to which Israel has attacked and bombarded Hamas and Hezbollah positions in Gaza and in Lebanon. But the rhetoric and the statements coming out of Tehran are...

are a combination of obvious face-saving with the foreign minister saying that we knew this was going to happen, we had intelligence on HTS, the group leading the rebels. We knew that they were making advances from Idlib. We didn't know that the army would retreat so easily. So I think they were blindsided and shocked by the speed at which the army just kind of backed off.

and Assad just left. At the same time, we had some quite important comments from Khamenei, where he said that what's happened in Syria is obviously a plot designed by the US and Israel, and he implied, suggested quite strongly that Turkey

was very heavily involved as well. And he basically made a vow that the axis of resistance will live on and it will actually be stronger and we will expand further. It's difficult for us to say that that plank of Iran's foreign policy is dead. I think it's too soon to call that. But I think there is definitely a sense that Iran will, for now, maybe retreat,

assess the situation, wait to see where the chips might fall. A crucial question mark for the Iranian regime is obviously Trump's return to the White House, what that means. He's going to side with Netanyahu, but the extent to which he is going to

to everything that Netanyahu wants to do and that's going to be really, really crucial. Does Iran actually have options in the region to expand its influence, other proxies, other allies that it can lean on? One other possibility

part of its network of allies I should have mentioned, quite significant and very important, is in Iraq. Iran's wielded huge influence on Iraqi politics and the Iraqi military since the US invasion of Iraq in 2003 after they toppled the Baathist regime run by Saddam Hussein that left this massive sort of power vacuum for Iran to kind of like

go in there and exert lots of influence. So potentially it can double down on those efforts if it has enough buy-in from the Iraqi government. There were some suggestions, some

unofficial and I think unverified reports suggesting that Iraq didn't want to get involved in what was going on in Syria, didn't want to go into Syria. And so it'll be interesting to know whether that was a request that Iran made of the Iraqis and whether they pushed back on that. So even that relationship, there's a bit of a question mark there. But, you know, it still has the Houthis in Yemen, but it's also struggling with very weak economy, extremely weak economy.

And it's a very unpopular system right now, the Islamic Republic. It can't rely and lean on public legitimacy or popularity in order to be able to convince the public that it's a good idea for it to double down on this and spend more money on what has turned out to be a very costly foreign enterprise. Okay, Golan Motavali, who leads our coverage of Iran at Bloomberg, thank you very much for joining us.

For more explanations like this one from our team of 2,900 journalists and analysts around the world, search for Quick Take on the Bloomberg website or Bloomberg Business app. I'm Stephen Carroll. This is Here's Why. I'll be back next week with more. Thanks for listening. Not everybody likes talking about money. Some people find it awkward.

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