The Iran Deal’s Bigger Loser

The decision to fork over $100 billion in sanctions relief to Iran as part of last summer’s nuclear deal could be the worst thing that’s happened to the Lebanese terrorist group Hezbollah in years.

Of course, Hezbollah publicly embraced the news. Iran provides an estimated $100–$200 million to the group each year. And now, with sanctions relief rolling in, even more Iranian cash might find its way to Hezbollah’s stronghold in the Beqaa Valley, where it can turn into new weapons, training programs, and other materiel.

Hezbollah’s payday, though, comes at a time when Iran’s Gulf Arab foes are out to punish the group for stoking the region’s sectarian wars. Hezbollah’s position on the front lines in Syria, where it wants to shore up embattled dictator—and Iranian proxy—Bashar al-Assad hasn’t gone unnoticed. Nor have reports of it warring alongside Yemen’s Houthi rebels, another Iranian proxy that seeks to bring down the Sunni-backed government.

After decrying Hezbollah’s destabilizing activities around the region for years, earlier this month, the Gulf Cooperation Council (GCC) finally slapped sanctions on the group, branding it as a terrorist organization and taking measures to freeze its assets. This came on the heels of similar measures by Saudi Arabia and Bahrain. Riyadh also made headlines by halting $3 billion in assistance to the Lebanese government, claiming that it is now irredeemably corrupted by Hezbollah. Last Friday, the Arab League also declared Hezbollah to be a terrorist organization. It’s an astounding development considering that the organization was hailed across the Arab world for forcing Israel to withdraw from South Lebanon in 2000 and for fighting the Israelis to a draw in a month-long war in 2006.

Admittedly, not every Sunni state is ready throw Hezbollah under the proverbial bus. Iraq and Lebanon were less than enthusiastic about blacklisting the group. But the Arab League meeting made it clear that the bulk of the Arab states will go the way of the GCC and block the group from their banking and business sectors.

Hezbollah is already getting similar treatment in the West. It is designated as a terror group, in some shape or form, by Australia,Canada, France, the Netherlands, New Zealand, the United Kingdom, the United States, and the European Union. Meanwhile, the U.S. Congress just passed legislation to boost the Treasury’s efforts to track the organization’s financial assets worldwide by authorizing secondary sanctions against financial institutions and entities that do business with Hezbollah.

Although Russian President Vladimir Putin doesn’t have much in common with Washington these days, even he seems to understand the limits of his country’s policies when they serve to benefit Hezbollah. Earlier this month, the Russian strongman reportedly halted a shipment to Iran of advanced S-300 surface-to-air weapons that could be game-changers in stopping an attack on Iran’s nuclear facilities. Putin made the move after Israel furnished intelligence that Tehran had been passing Russian-made SA-22 missiles to Hezbollah.

Israel, of course, has the biggest axe to grind with Hezbollah. Over the years, the two sides have traded heavy blows in multiple wars. Israel is alarmed that, in the next war, the group might be better equipped thanks to Iranian sanctions relief. Israeli military brass recently upped their estimate for Hezbollah rockets from 100,000 to 150,000.

A flurry of reports indicates that Israel is making plans to make swift work of Hezbollah in the next conflict. Senior Israel officials confirm this, adding that because of the boost Hezbollah is set to receive as a result of the Iran nuclear deal, the group has become Israel’s most urgent and immediate military challenge. They admit that Hezbollah is not just a terrorist organization but a military force in every sense, one stronger than 90 percent of the world’s armies, with over 40,000 troops, air defense systems, commando tunnels, and drones. And although such things are rarely stated outright, a surprise Israeli pre-emptive strike that would deprive the group of some of these advantages is not out of the question.

Even as the winds of war blow in Israel, Hezbollah doggedly fights on at the bidding of Iran in Syria and Yemen. And those wars are taking their toll. Reports out of Syria suggest that Hezbollah may have deployed between 6,000 and 8,000 fighters to the war, but that it has already lost 1,300 of them. Isolated and bloodied, the group is lashing out at the Saudis and the Israelis, decrying what it claims is a “Zio–Wahhabi plot.” But there is no plot. Hezbollah has earned these enemies. They are committed to preventing the group from getting stronger as a result of the Iran sanctions relief windfall. And it is increasingly clear that they are not alone.

Jonathan Schanzer is Vice President for Research at Foundation for Defense of Democracies. Follow him on Twitter @JSchanzer