Funding of the Axis of Resistance

The Funding of the Axis of Resistance refers to the way the axis, a network of Iranian-backed militias and political groups in the Middle East,^[1][2] gains its financial resources. Via the Qods Force^[3]—a special forces unit of the Iranian Revolutionary Guard Corps—Iran has allocated substantial resources to strengthen each group's capabilities over decades.

The funding of the Axis of Resistance directly impacts Iran's economy and the livelihoods of its civilians by diverting substantial financial resources away from critical domestic needs, and channeling them toward sustaining proxy groups and military engagements. The funding of the axis includes using money through oil revenues, taxes and state managed funds.^[4][5]

Background

Main article: Axis of Resistance

The Axis of Resistance is a network of Iranian-backed militias and political groups in the Middle East,^[1][2] formed by Iran by uniting and grooming armed groups that are dedicated to confront the influence of United States and Israel in the Middle East.^[6][7][8] The U.S. designates most of these groups as terrorist organizations.^[1] Hezbollah, which emerged in Lebanon in the early 1980s with direct backing from Iran and shares its Shi'ite Islamist ideology,^[1][9] is the most prominent member of the axis.^[1] Other prominent groups within the coalition include the Palestinian group Hamas,^[1][2][7] the Palestinian Islamic Jihad,^[2] the Houthi movement in Yemen,^[2][7] and various Shi'ite groups in Iraq and Syria.^[1][2][7] The Syrian regime was the only other state member except Iran,^[1] and used to host fighters recruited and trained by Iran.^[6]

Assad's regime in Syria

Iran had long envisioned establishing a dominant influence in Bashar al-Assad's Syria, leveraging the nation's reconstruction after the Syrian civil war that began in 2011. The fall of the Assad regime, however, marked a serious setback for Iran's ambitions in the Middle East. Tehran had long envisioned establishing a dominance. This act brought an end to years of investment and strategy.^[10][11]

Bashar al-Assad, former Syrian autocrat

Iran's involvement in Syria has been marked by significant financial and military investment. During the Syrian civil war, Iran spent an estimated $50 billion supporting Assad's regime.^[12][13][14] Beyond direct financial and material support, Iran sought to entrench its influence in Syria through a series of economic agreements, particularly after 2017. These agreements often prioritized Iranian interests over Syrian sovereignty, granting Iran advantages in key sectors, including telecommunications, agriculture, and infrastructure. One agreement involved the construction of a strategic oil port on the Mediterranean Sea.^[15]

The financial toll of Iran's involvement in Syria has been immense. On December 7, 2024, former Iranian lawmaker Bahram Parsaei revealed that Syria's debt to Iran had exceeded $30 billion.^[14]

Hezbollah

Main article: Funding of Hezbollah

Hezbollah soldiers in a drill

Hezbollah, the Lebanese Shia militant group and political party, is among the primary beneficiaries of Iranian support. According to the US State Department, Iran is the primary source of the group's training, arms, and financial support, contributing hundreds of millions of dollars annually to the group.^[16] In 2018, US officials estimated Iran transfers $700 million annually.^[17][18]

Yemeni Houthis

In Yemen, Iran backs the Houthi movement, providing them with weapons, training, and financial assistance. While precise funding figures are elusive, the U.S. Treasury Department has sanctioned networks accused of facilitating billions of dollars for Iran's military, which, in turn, supports groups like the Houthis.^[19]

Iraqi Militias

Iranian support extends to various Shia militias in Iraq, such as Kata'ib Hezbollah and Asa'ib Ahl al-Haq. These groups receive funding, training, and arms from Iran, though specific financial details are not publicly disclosed. The U.S. State Department has noted Iran's provision of sophisticated weapons, including unmanned aerial systems, to these militias.^[20]

Palestinian Groups

Iran also extends financial aid to Palestinian militant organizations, including Hamas and Palestinian Islamic Jihad. Historically, this support amounted to around $100 million annually.^[21] However, reports indicate that by 2023, Iran had increased its funding for Hamas to approximately $350 million per year.^[22]

Effect

Main article: Iranian economic crisis

Since 2000, Iran has consistently expanded funding for proxy groups and military programs, while its civilian population has borne the economic burden. As military and proxy spending surged, especially post‑2011 sanctions, state revenues were redirected from public services and subsidies, resulting in inflation, rising unemployment, widespread poverty, and food insecurity.^[23][24] Iran's Ministry of Social Welfare reported that 57 percent of the population suffers from some degree of malnourishment, while 30 percent now live below the poverty line. The Iranian rial lost 46 percent of its value, making it the least valuable currency in the world.^[25]