Since Hamas’s attack on Israel on October 7, 2023, the Iranian regime and its most powerful regional proxy, Hezbollah, have suffered significant setbacks.

While Tehran has long relied on Hezbollah to project power in the Middle East, the ongoing conflict, intensified sanctions, and internal unrest have severely strained both. This weakening presents not only challenges for Iran’s regional ambitions but also new opportunities for Lebanon to reclaim its sovereignty and rebuild its economy.

Iran’s economy has been in free fall due to a combination of renewed US sanctions, a decline in oil exports, and increasing domestic unrest. Reduced oil revenues and growing international isolation are placing severe economic pressure on the regime in Tehran.

Due to the renewed US “maximum pressure” campaign, the Iranian rial plunged to about 892,500 to the dollar on the unofficial market, with the country’s inflation hitting 35 percent.

Militarily, the regime has struggled to maintain its regional influence. The Islamic Revolutionary Guard Corps (IRGC) has been stretched thin, supporting proxy forces in Lebanon, Syria, Iraq, and Yemen.

Meanwhile, Israeli airstrikes and audacious pager and walkie-talkie attacks, as well as US military operations have targeted Iranian infrastructure in Syria and Iraq, limiting Tehran’s ability to supply weapons and funds to its allies.

According to US intelligence reports, Iran’s arms shipments to Hezbollah have dropped by nearly 30 percent since October due to intensified border monitoring and strikes on key supply routes.

Hezbollah, once the dominant force in Lebanon, is now confronting unprecedented challenges that have significantly diminished its power and influence.

The downfall of Syrian President Bashar al-Assad has dealt a severe blow to Hezbollah. Al-Assad’s regime was a crucial ally, providing a vital weapons-smuggling route from Iran through Syria to Lebanon.

With al-Assad’s ousting, this supply line has been severed, crippling Hezbollah’s ability to resupply and rearm. This disruption has left Hezbollah unable to effectively support its fighters and maintain its military infrastructure.

Hezbollah’s post-October 7, 2023, attacks on Israel have led to massive casualties, with hundreds of fighters killed. Meanwhile, Lebanon’s economic crisis has hit Hezbollah’s financial network hard, making it more difficult to pay fighters and provide social services.

In past years, Hezbollah relied heavily on Iranian funding, receiving an estimated $700 million annually. However, with Iran’s economic troubles, this funding has reportedly dropped by as much as 30 percent, forcing Hezbollah to scale back operations.

Local businesses affiliated with Hezbollah have suffered due to international banking restrictions, further limiting the group’s ability to function as a parallel state within Lebanon.

Moreover, growing anti-Hezbollah sentiment within Lebanon has led to protests against the terrorist group’s dominance in politics.

Many Lebanese citizens, frustrated with Hezbollah’s role in dragging the country into conflict, have increasingly called for the group to disarm.

According to a recent poll by the Arab Barometer, 67 percent of Lebanese citizens now view Hezbollah as a destabilizing force, a sharp increase from 48 percent in 2021.

With Hezbollah’s and Iran’s waning influence, Lebanon faces a historic opportunity to reclaim its political and economic independence.

Lebanon’s national army and security forces can assert their authority as the sole legitimate defenders of the state.

Without Hezbollah’s monopolization of resources and Iranian-backed economic networks, the government can pursue essential economic reforms. Reduced corruption and investment in infrastructure, could help stabilize the Lebanese pound and attract foreign investors.

For decades, Lebanon has been caught between regional conflicts. Distancing itself from Iran’s agenda and focusing on rebuilding its domestic institutions could set Lebanon on a new course. It finally has the space to repair its diplomatic relationships with Gulf neighbors, the US, and Europe, paving the way for major reinvestment in the country.

Last week, US Deputy Special Envoy for the Middle East, Morgan Ortagus, emphasized that Hezbollah’s involvement in Lebanon’s new government is a “red line” for the United States.

She stated, “We are committed to making sure that Hezbollah is not a part of this government in any form and that Hezbollah remains disarmed and militarily defeated.”

While Iran and Hezbollah remain powerful actors, their influence has significantly weakened since October 7, 2023. This presents a crucial turning point for Lebanon.

If the Lebanese people and government seize this moment to rebuild, Lebanon could emerge stronger, free from foreign control, and on a path toward stability and prosperity. The country’s future is at stake, but for the first time in years, there is hope for a rebirth.