Hezbollah to Houthis: Iran’s regional influence in Middle East eroding fast. How it impacts global trade and oil supply
Tehran’s reach, once formidable and feared, is being reined in by regional backlash and the unrelenting pushback of the United States and Israel. The unravelling of this network signals not just a shift in Middle Eastern power dynamics, but also a recalibration of how Iran engages with the world.
- Jun 22, 2025,
- Updated Jun 22, 2025 2:04 PM IST
Iran’s decades-long strategy of power projection through proxy forces is faltering. From the battlefields of Syria to the political arenas of Lebanon, and from the strategic waterways off Yemen to the volatile streets of Iraq, the “Axis of Resistance” is buckling under mounting pressure.
Tehran’s reach, once formidable and feared, is being reined in by regional backlash and the unrelenting pushback of the United States and Israel. The unraveling of this network signals not just a shift in Middle Eastern power dynamics, but also a recalibration of how Iran engages with the world.
Iran’s geopolitical clout in the Middle East has long hinged on its support for a network of proxy groups — Hezbollah in Lebanon, the Houthis in Yemen, and various militias in Iraq and Syria. Dubbed the “Axis of Resistance,” this alliance has allowed Tehran to exert influence across borders, reshaping power structures and impacting regional security and trade flows.
In Lebanon, Hezbollah remains Tehran’s most potent proxy, maintaining both military and political sway. Armed and funded by Iran, the group gives Tehran a strategic foothold on Israel’s northern border, complicating diplomatic efforts and fueling ongoing regional tensions.
Yemen’s Houthi rebels, meanwhile, have turned the Bab el-Mandeb Strait into a flashpoint. Their control over this critical maritime chokepoint — a vital artery for global oil and trade — gives Iran indirect leverage over global markets. Disruptions here risk driving up insurance premiums, oil prices, and logistical costs for international shippers.
In Iraq and Syria, Iran-backed militias continue to shape local power dynamics. In Iraq, these forces have periodically disrupted energy infrastructure, posing risks to global oil supplies. In Syria, they help Iran secure strategic corridors to the Mediterranean, deepening Tehran’s regional entrenchment.
This vast proxy web has enabled Iran to influence key global systems — from oil pricing to trade routes. But as instability persists, so does the risk of market shocks, supply chain disruptions, and geopolitical volatility. With global economies tethered to Middle Eastern energy flows, the stakes of this unraveling are far-reaching and immediate.
Tensions between Iran and Israel are stoking fears of oil supply disruptions in the Middle East, sending crude prices higher as markets brace for heightened geopolitical risk. As OPEC’s third-largest producer, Iran pumps around 3.3 million barrels of crude per day — a volume significant enough to rattle global markets if threatened.
Iran’s decades-long strategy of power projection through proxy forces is faltering. From the battlefields of Syria to the political arenas of Lebanon, and from the strategic waterways off Yemen to the volatile streets of Iraq, the “Axis of Resistance” is buckling under mounting pressure.
Tehran’s reach, once formidable and feared, is being reined in by regional backlash and the unrelenting pushback of the United States and Israel. The unraveling of this network signals not just a shift in Middle Eastern power dynamics, but also a recalibration of how Iran engages with the world.
Iran’s geopolitical clout in the Middle East has long hinged on its support for a network of proxy groups — Hezbollah in Lebanon, the Houthis in Yemen, and various militias in Iraq and Syria. Dubbed the “Axis of Resistance,” this alliance has allowed Tehran to exert influence across borders, reshaping power structures and impacting regional security and trade flows.
In Lebanon, Hezbollah remains Tehran’s most potent proxy, maintaining both military and political sway. Armed and funded by Iran, the group gives Tehran a strategic foothold on Israel’s northern border, complicating diplomatic efforts and fueling ongoing regional tensions.
Yemen’s Houthi rebels, meanwhile, have turned the Bab el-Mandeb Strait into a flashpoint. Their control over this critical maritime chokepoint — a vital artery for global oil and trade — gives Iran indirect leverage over global markets. Disruptions here risk driving up insurance premiums, oil prices, and logistical costs for international shippers.
In Iraq and Syria, Iran-backed militias continue to shape local power dynamics. In Iraq, these forces have periodically disrupted energy infrastructure, posing risks to global oil supplies. In Syria, they help Iran secure strategic corridors to the Mediterranean, deepening Tehran’s regional entrenchment.
This vast proxy web has enabled Iran to influence key global systems — from oil pricing to trade routes. But as instability persists, so does the risk of market shocks, supply chain disruptions, and geopolitical volatility. With global economies tethered to Middle Eastern energy flows, the stakes of this unraveling are far-reaching and immediate.
Tensions between Iran and Israel are stoking fears of oil supply disruptions in the Middle East, sending crude prices higher as markets brace for heightened geopolitical risk. As OPEC’s third-largest producer, Iran pumps around 3.3 million barrels of crude per day — a volume significant enough to rattle global markets if threatened.