Why Iran Has Had a Terrible 2024
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This video is brought to you by Nebula. Over the past 40 years or so, Iran developed a proxy network that allowed it to project power across the Middle East while insulating itself from direct consequences.

This policy was remarkably successful, and foreign policy analysts would often talk about an Iran-led axis of resistance encircling Iran's regional foe, Saudi Arabia. However, in the past year or so, this network has frayed dramatically. Hamas and Hezbollah have been degraded by the Israeli campaigns in Gaza and southern Lebanon, and over the weekend, Syrian dictator Bashar al-Assad, perhaps Iran's most important regional ally, was suddenly ousted.

So, in this video we're going to have a look at Iran's strategic crisis, how it compounds Iran's pre-existing domestic challenges and what might happen next. Before we start, if you haven't already, please consider subscribing and ringing the bell to stay in the loop and be notified when we release new videos. Let's start with a bit of context. Iran has long relied on what are often called proxies to exercise power and influence in the Middle East.

These proxies are basically non-state actors or militias that rely on Iranian support and are therefore essentially controlled by Iran. This policy really developed in the 80s, only a few years after the Ayatollahs came to power when Iran started supporting Hezbollah against Iran's arch-nemesis Israel after the IDF invaded southern Lebanon.

This gamble paid off handsomely. Not only did Hezbollah wage a constant and costly guerrilla war against the IDF until their withdrawal in 2000, but Hezbollah would go on to establish themselves as the de facto government in southern Lebanon, and a dominant player in Lebanese politics. Their success with Hezbollah encouraged the Ayatollahs to expand their proxy network, often by capitalizing on geopolitical instability.

When Iraq collapsed into chaos after the US-led invasion in 2003, for instance, Iran stepped in to support certain Iran-aligned militias, creating a proxy network that still dominates Iraqi politics today. In the 2010s, Iran pulled a similar trick in Yemen, supporting the Houthis against a Saudi-led coalition.

While Assad isn't a proxy in the same way as, say, Hezbollah, Iran's much-needed support for his regime after the Arab Spring in 2011 turned Syria into perhaps Iran's most important regional ally. Iran was also able to use Syria as a land corridor to supply not just Hezbollah in Lebanon, but also Hamas in Gaza, whom Iran has been supporting against Israel for the past decade or so.

Anyway, these proxies have proved remarkably effective for at least two reasons. First, they're cheap. Iran isn't a wealthy country at the moment – its GDP per capita has actually halved in the past decade – and it simply couldn't afford to maintain a permanent troop presence across the Middle East. Proxies, however, allow Iran to project power and influence across the region without spending serious cash.

Second, they give Iran a degree of plausible deniability. Iran knows it can't afford to fight a full-scale war with, say, the US, and proxies allow Iran to deal its regional enemies the occasional bloody nose without inviting direct retaliation.

In Iraq, for instance, Iranian-backed militias have been constantly harassing US troops in the region for the past year or so. But this hasn't been enough to justify a direct retaliation against Iran from the US, because Iran can just blame its proxies. Unfortunately for Iran, its proxy network has had a tough few months. Most obviously, Hamas has been under constant assault since the October 7th attacks last year.

While there's some debate over how many Hamas battalions are still operational, most of Hamas's leadership has been eliminated. And polling suggests that the group is becoming less popular inside Gaza.

According to polling by the Palestinian Center for Policy and Survey Research in September, which is when the latest polling was carried out, only 29% of Palestinians said that they would vote for Hamas if new elections were held in Gaza, down from 41% a year ago. And a majority of Palestinians in Gaza now think that Hamas was wrong to launch the October 7th attacks, compared to 23% in March.

Similarly, just 28% of Palestinians in Gaza said that they thought that Hamas would win the war, down from 56% in March, and 40% said that they were in favour of a negotiated settlement, up from 23% in March. While Hamas might be succeeded by another Gazan militant group, this new outfit is unlikely to be that friendly with Iran, given Iran's lacklustre support for Hamas since October 7th.

It's a similar story with Hezbollah. Again, while Hezbollah clearly hasn't been eradicated, after all the group has tens of thousands of fighters, its leadership has been mostly eliminated. And it's fair to say that the recent war with Israel didn't go brilliantly.

Hezbollah's woes will be further compounded by the ousting of Assad, because Iran used to supply Hezbollah via a land corridor that ran through Syria. In sum, this means that, in the past year or so, two of Iran's biggest proxies, Hamas and Hezbollah, have been seriously degraded, and its most significant regional ally has now been removed. This essentially leaves Iran with just its militias in Iraq and the Houthis in Yemen, but even here there are some caveats worth mentioning.

First, after nearly two decades, ordinary Iraqis are getting fed up with Iran's ongoing influence in the country, as evidenced by the massive and recurring anti-Iran protests that we saw between 2019 and 2021. And second, the Houthis are widely considered to be the most independent of Iran's proxies, and some analysts think that they're better defined as an Iranian ally or partner rather than proxy.

While the Houthis do receive a fair bit of support from Iran, Iran only really started supporting them in the 2010s, and the Houthis had been intermittently spatting with Yemen's Sunni-majority government since the early 1990s. The Houthis are also more financially independent than some of Iran's other proxies. They control most of Yemen's population centres, allowing them to collect substantial tax revenues, as well as some of the country's oil and gas fields.

All in all, Iran's proxy network has been essentially dismantled, at least for the short term, leaving Iran in a significantly more vulnerable position

This foreign policy crisis comes on top of a number of domestic crises facing the Ayatollahs, including an ongoing economic crisis that will probably be exacerbated by any new sanctions that the incoming Trump administration decides to impose, and a looming succession crisis. Ayatollah Khomeini is now 85, but lacks an obvious successor, in part because the Ayatollahs are deeply unpopular with ordinary Iranians.

Now, to be clear, just because Iran is in some sense losing, that doesn't mean that its rivals are winning. Israel's international reputation has been badly damaged by the war in Gaza, and the US is clearly struggling to balance its various foreign policy objectives.

It's also worth saying that the Ayatollahs have a proven track record of capitalizing on their enemies' missteps, whether that's the US in Iraq in 2003 or Israel in southern Lebanon in the 80s. And it would be foolish to write them off in the long term.

Nonetheless, at the moment, Iran does look uniquely weak, and the Ayatollahs have a difficult few years ahead. As you've probably noticed, the news cycle is particularly fast right now, with coups, elections, and governmental gossip happening all over the world.

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