Israel’s intensified targeting of border crossings between Lebanon and Syria, especially illegal routes, has led to a sharp decline in the shadow economy benefiting Hezbollah and key Syrian actors. This cross-border smuggling network, involving large quantities of essential goods from Lebanon to Syria, used to generate millions of dollars and plays a vital role for both Hezbollah and the Syrian regime.

Sources in Damascus told Asharq Al-Awsat newspaper that Hezbollah is actively working to maintain this “parallel economy,” which has become crucial to its financial stability as the conflict persists. With the ongoing regional escalation, Hezbollah’s need for substantial funds has intensified.

Local sources in western rural Homs, adjacent to Lebanon’s Bekaa Valley, reported that prior to the escalation of Israel’s conflict with Hezbollah in Lebanon, dozens of fuel tankers could be seen crossing into the province from Lebanese territory almost daily. However, since Israel began its intensified campaign on September 23, sightings of these fuel convoys in Homs have sharply decreased. Israel’s focus on border crossings, both legal and illegal, has not only disrupted these smuggling routes but also led to an acute fuel shortage across Homs and other government-held areas in Syria, with prices surging on the black market.

Sources noted seeing many large covered trucks, potentially loaded with essential goods or tobacco, frequently crossing from Lebanon into Syria, though this traffic has also noticeably decreased since Israel increased its strikes. The smaller-scale smuggling of electronic devices and food products from Lebanon, typically conducted by Syrian individuals affiliated with Hezbollah using unofficial routes, has also dwindled due to fears of Israeli strikes.

The “shadow economy,” or “parallel economy,” that Hezbollah and prominent Syrian actors rely on has long been in place, even before the current Israeli escalation in Lebanon and Gaza, according to sources in Damascus. This network reportedly operates in coordination between Hezbollah and influential actors within the Syrian army, facilitating the smuggling of goods across unofficial routes primarily from Lebanon to Syria. Essential goods like fuel, gas, tobacco, and food products are often involved.

In recent years, this smuggling economy has served as an additional revenue stream for Hezbollah, complementing the support it receives from Iran. For the Syrian regime, this “parallel economy” not only represents a significant income source but also a partial solution to some of the domestic market shortages.

However, Israel’s recent escalation against Hezbollah has thrown a wrench into this setup. The intensified Israeli strikes on illegal crossings are aimed at disrupting arms and ammunition supplies to the group. These supplies, largely from Iran, pass through Iraq and enter Lebanon via Syria. By striking both legal and illegal routes, Israel has indirectly hit the “parallel economy” that supports both Hezbollah and the Syrian regime.

As Israel’s operations continue, this economy is likely to suffer further. If Israeli surveillance and strikes on these routes persist, Hezbollah’s financial strain will only worsen, sources warned. With escalating conflict, Hezbollah now requires even more funding and thus is striving to keep its smuggling networks operational by all means possible.

Israel has targeted border crossings between Syria and Lebanon 32 times within six weeks since escalating its operations, according to the Syrian Observatory for Human Rights. The strikes are part of Israel’s broader effort to prevent supplies from reaching Lebanon and to discourage Syrians fleeing conflict from returning across the border.