In the decades following the 1979 Islamic Revolution and the Iran hostage crisis, Iran embraced a new radical identity, doubling down on its revolutionary messaging and expanding its influence through Shi’a political movements and armed groups. Iran’s power, however, does not rest on ideology alone. The country has acquired massive fossil fuel wealth from holding the second-largest natural gas reserves and the fourth-largest crude oil reserves in the world. Its control of territory along the Persian Gulf and the Strait of Hormuz gives it leverage over the global energy trade. Militarily, it commands a formidable force in the Middle East, with over one million active and reserve personnel, and Iran maintains the region’s largest stockpile of ballistic missiles and advanced combat drones. Most alarmingly, as of May 2025, the International Atomic Energy Agency warned that Iran had enough enriched uranium for at least nine nuclear weapons. Despite President Trump’s strikes on Iranian nuclear facilities in July, Iran will likely try to reconstitute its nuclear program.
Despite Iran’s decades-long role as a key player in Middle Eastern geopolitics, its regional influence is under threat. The country’s array of alliances and proxy forces is now fraying. From Syria to Lebanon to Armenia, Iran is watching longtime partners distance themselves or collapse. In the midst of this shifting regional landscape, Iran now faces a crossroads in regard to its foreign policy. On the one hand, the country could pursue diplomatic normalization with the Gulf and Western nations while simultaneously focusing on internal stability. Alternatively, it could choose to double down on its proxy networks and nuclear program, bringing about the risk of even greater isolation and internal unrest. Regardless, Iran must rethink its strategy or risk losing its influence entirely.
For over a decade, Iran has invested billions of dollars propping up Syria’s Bashar al-Assad regime during the state’s civil war, maintaining an important sphere of influence. By aligning with Assad during the war, Iran positioned itself as a kingmaker in the region’s most transformative conflict. Syria served as Iran’s land bridge to Lebanon, allowing it to arm and support Hezbollah. This bridge helped Iran maintain pressure on Israel without confrontation, creating what’s often referred to as the “Axis of Resistance.” Syria also provided Iran with forward operating space beyond its own borders. If Iran were attacked, Syria and Hezbollah could retaliate on its behalf. Nothing could go wrong.
Then, in December of 2024, opposition forces seized Damascus, Assad fled the country, and the Assad regime utterly collapsed after decades of rule, bringing about new leadership. The new government, led by Ahmed al-Sharaa and Hay’at Tahrir al-Sham, distanced itself from Iranian alignment. Many Syrians and leaders in this new regime view Iran’s intervention during the civil war as destructive and in line with Assad’s repression of the people. Iranian-backed militias, including Hezbollah, were involved in brutal campaigns that caused widespread suffering. Instead, the new Syrian regime is focused on restoring its national sovereignty and dignity, and is actively distancing itself from foreign intervention. Leaders like the new Foreign Minister, Asaad al‑Shibani, have criticized Iran for spreading “chaos” in Syria and interfering in the nation’s affairs. While Assad’s Syria was one of Iran’s strongest allies—providing diplomatic cover, a geographic corridor to Lebanon, and military cooperation—that support structure collapsed. Without Assad, the supply lines, military bases, and proxy networks that Iran relied on in Syria may be irreversibly disrupted or dismantled altogether.
If Syria represents Iran’s unraveling partnerships, Hezbollah reflects the collapse of its most successful proxy. The relationship between Hezbollah and Iran began in the early 1980s after the Iranian Revolution and was shaped by the Lebanese Civil War and Israel’s military presence in southern Lebanon. Ayatollah Khomeini aimed to spread his Shi’a Islamist ideology across the region, and found fertile ground in Lebanon’s large, marginalized Shi’a population. Iran became Hezbollah’s primary supporter, giving hundreds of millions of dollars in annual funding, plus weapons, intelligence, and political support. In exchange, Hezbollah conducted attacks on US and Israeli targets.
However, this relationship has recently undergone a drastic change. On September 27, 2024, Israel completed a precision airstrike on Hezbollah’s war operations room in Beirut, killing Hassan Nasrallah—the group’s secretary‑general—as well as several senior commanders. Just days later, another strike eliminated Hashem Safieddine, Nasrallah’s likely successor. These assassinations dealt a severe blow to Hezbollah’s command structure, which created a leadership vacuum as well as uncertainty about the group’s strategic direction and ability to coordinate effectively under pressure. The crumbling of Hezbollah has revealed possible weaknesses in Iran’s ability to stop the West from dismantling its best proxy.
One of Iran’s tools in gaining power was the perception that it and its allies can hit back and that attacks on them carry severe costs. However, with Hezbollah in this weak state, Iran may need to reconsider how credible its threats are without the proxy’s presence.
Additionally, following US and Israeli attacks on Iranian targets in early 2025, including the assassination of top Islamic Revolutionary Guard Corps (IRGC) commanders and direct strikes on infrastructure, Iran’s defense power took a visible hit. Although Iran did retaliate by launching missiles at Tel Aviv, the response was underwhelming. Despite years of threats and warnings from the Western media, the Iranian regime has not delivered as expected. This has prompted a reevaluation: Is Iran even as powerful as we thought it was?
The most recent development has been the shift in Iran’s relationship with Armenia. Historically, Armenia has been one of Iran’s most stable regional allies. The two countries share a border and a long-standing economic partnership; in 2024, the trade volume between Iran and Armenia was valued at $737.4 million. Much of their cooperation hinges on geographic proximity: Armenia relies on Iranian gas and electricity, access to goods from Iran, and Iranian tourists. Iran, in turn, gains a reliable partner that gives it overland access into the Caucasus and Eurasian markets.
But a new project is now threatening to shift this balance. The Armenian‑Azerbaijani peace agreement, signed in August 2025, includes the implementation of a transit corridor known as the Zangezur Corridor (or the “Trump Route for International Peace and Prosperity”). Under this agreement, the United States has development rights to operate the corridor on Armenian territory for 99 years. If the United States controls the Zangezur Corridor, it gains leverage over a major overland route that could have otherwise been used for Armenia‑Iran trade.
This project reflects Armenia’s broader agenda of “Westernizing,” or at least moving away from reliance on nations like Russia and now Iran. Moreover, even though Armenia retains its sovereignty, US control over territory and infrastructure can be seen by Iranians as an encroachment or as a sign that Armenia is moving away from being an ally.
Zooming out, the region as a whole appears to be moving into a new era without Iran, beginning with the unraveling of some of Iran’s largest regional alliances. Iran’s relationships with Syria, Hezbollah, and Armenia once represented pillars that upheld its influence, and yet, in just the past year, all three have either collapsed or shifted away from Iran. This raises an important question: Has a new power vacuum emerged, and will Arab states or other regional actors now move in to fill it? Arab powers—like Saudi Arabia and the United Arab Emirates—with strong Western backing have rapidly expanded their influence, potentially positioning themselves to fill this void.
While Iran is far from irrelevant (it remains a nuclear threshold state with the most significant missile force in the region), it is increasingly clear that its old model of power is breaking down. To remain competitive, Iran will need to shift toward a more pragmatic foreign policy. This could involve investing in diplomatic normalization and prioritizing domestic stability over ideological expansion. Alternatively, it could double down on its remaining proxies and accelerate its nuclear initiatives. Either way, the pressure is on.