Throughout its history, the ‘axis of resistance’ has demonstrated the ability to adapt in response to external shocks. Despite suffering multiple setbacks in 2024, the axis remains more resilient than many acknowledge.
Following Hamas’s 7 October 2023 attack on Israel, the Israeli government launched a transnational war to reshape the Middle East. Its goal was to weaken and remove from power Iran and its allies, some of which had launched airstrikes in support of Palestine and collectively known as the ‘axis of resistance’. These included Hamas, Hezbollah in Lebanon, the Houthis in Yemen, the regime of Bashar al-Assad in Syria and parts of the Popular Mobilization Forces (PMF) in Iraq. Bolstered by advanced technologies, Israel’s military superiority executed a ‘total war’ strategy that flattened and depopulated neighbourhoods and cities in Gaza and Lebanon.
Israel’s military campaign substantially degraded Iran’s network of alliances in the region, but has not entirely destroyed it. Even the unexpected abrupt collapse of the Assad regime in late 2024 did not spell the end for the axis. It proved much more resilient than some Western observers acknowledge. This resilience stems from the adaptability of the axis and its region-wide networks. Iran has been able to use these networks to adapt to external shocks – including those as extreme as the post-7 October context. The weakening of Hezbollah in Lebanon and the loss of its ally in Syria compelled Tehran to leverage other axis members, including the PMF in Iraq and the Houthis in Yemen. These two groups in particular began collaborating closely to bolster supply chains and mitigate axis losses in the other arenas.
Key to understanding the axis’s resilience is the fact that the constituent members are not merely non-state actors or armed groups. Their political, economic, military and ideological networks remain deeply embedded in their respective states and territories, and extend beyond country borders, reaching into regional and even global arenas. For instance, Iran’s military supply chains extend to Russia (which signed a new security partnership with Iran in January 2025) and its economic supply chains to China, which has become the main market for sanctioned Iranian oil and gas. This global dynamic has led some analysts to describe an ‘axis of upheaval’, encompassing states worldwide such as Iran, China, North Korea, Russia and Venezuela. In this view, these countries collectively oppose the US and its allies, collaborating to counteract their policies. Their ability to circumvent Western authority has become particularly pronounced in a global order increasingly moving away from US unipolarity.
However, the axis’s adaptability is further enhanced in a shifting world order, characterized not by rigid ‘spheres of influence’ or a settled ‘multipolar’ world order defined by counter-balancing blocs, but by a more fluid and unstable multi-alignment. In this context, states and actors do not align strictly with one bloc or another, but engage on a transactional, issue-by-issue basis. As this paper shows, this fluidity is particularly evident in the economic realm, where Iran’s ability to network and withstand shocks extends beyond collaboration with the so-called axes of resistance or upheaval. It also includes economic engagement with Middle Eastern governments that are traditional Western allies, such as the Gulf Arab states, which now interact more with Iran (for instance, significant amounts of Iran’s financial flows and energy trade move via Gulf Arab states) and urge Western governments to reconsider their antagonistic stance. This blurring of distinctions between allies and adversaries creates a context in which Iran can effectively pursue its survival and operate beyond just the ‘axis of resistance’.
This research paper examines the evolution of the axis of resistance, which developed into a crucial component of Iran’s foreign policy. The networks connecting Iran and its allies has enabled various groups within it to build resilience and foster interdependence, making the axis as a whole more fluid and difficult to dismantle. Historically, Tehran and its allies survived shocks by maintaining decentralized and interconnected networks across borders, adapting and recovering from disruptions by changing course. This included military setbacks such as the US assassination of General Qassim Soleimani in January 2020, the US-led invasion of Iraq in 2003 or the Israeli war in Lebanon in 2006; economic collapses like the 2019 Lebanese banking crash that dissolved many of the financial accounts of its members across the region; and domestic protests from their own publics.
A crucial element of the axis’s adaptability is the geoeconomic infrastructure linking each group to their respective state structures and to one another. Shortly after 7 October, Ali Akbar Ahmadian, secretary of Iran’s Supreme National Security Council, asserted that ‘resistance-oriented cooperation should also extend to economic levels.’ However, the use of economic strategies to support the network’s adaptability began well before this statement. A 1996 passage from the Islamic Revolutionary Guards Corps (IRGC)’s monthly publication Payam-e Enghelab, articulated the vision behind the policy:
Domestically, Iran and its allies embedded themselves in the ‘trenches of economics’ by becoming the governing authority. They each acquired significant state power through the development of patronage networks across national executive governments, parliaments, judiciaries, government bureaucracies and security sectors. This domestic power operated across informal and formal spaces, enabling groups to capture economic processes and access to government coffers, state-owned banks and other financial institutions crucial for economic lifelines. They also controlled the import and export of licit and illicit supply chains, from sanctioned oil and gas to medicine and foodstuffs.
The initiative was further driven by regional dynamics, including the collapse of the 1995 Conoco oil deal – an agreement for developing Iran’s oil fields – and the imposition of the 1996 Iran-Libya Sanctions Act by the US, which aimed to curb investments in Iran and Libya’s petroleum sectors. By developing economic connectivity across countries, Iran and its allies created markets and trade routes to regain financial capital and recover from shocks. For instance, US president Donald Trump’s 2018 ‘maximum pressure’ campaign again targeted Iran’s oil and gas industry, pushing Tehran to depend more on the informal economic interlinkages with the axis in Iraq and Syria to export its energy. US sanctions had also pushed the Assad regime in Syria to work more closely with Hezbollah and the banking sector in Lebanon to acquire indirect access to financial markets.
To trace this network and the context in which it operated, this paper focuses on two specific economic processes: financial flows and energy trading. These elements served as the lifeblood of the axis, enabling it to overcome economic, military and political disruptions.
The collapse of Syria’s ruling Assad regime in December 2024 seemed to present an exception to this thesis of resilience. The weakened alliance in the post-7 October context did play a role in the regime’s collapse, along with the impact of sanctions. But crucially, the rapid downfall of a 53-year-old regime across a few days happened largely due to the erosion of its domestic authority. Having lost significant legitimacy among the Syrian people, and relying heavily on violent repression to maintain control, Assad’s social power had significantly diminished over the course of a decade-long civil war. By late 2024, neither Iran nor Assad’s other external partners were willing or able to defend him and his regime. Rather than undermine the paper’s thesis, developments in Syria demonstrate a crucial point: the resilience of both the axis as a whole and its constituent parts depend on each part maintaining some degree of domestic authority and transnational connectivity. This is why other sanctioned regimes, including Iran, are better able to withstand external pressures.
The transnational nature of this economic system and its growing significance in a transforming global order has significant implications for US, UK and allied policy, which to date has largely relied on country-centric approaches in its conflict response. The US, UK and their allies have attempted various measures to reduce the influence of Iran and the axis, including military strikes and assassinations, economic sanctions, the building of parallel armies such as the Lebanese Armed Forces (LAF) or the Counter Terrorism Service (CTS) in Iraq, and policing of borders such as that between Lebanon and Syria. However, these measures have failed to eliminate or constrain the economic networks underpinning the axis because of its blurred institutional (formal and informal) and geographic lines. This challenge is compounded by a transforming global order where traditional ‘spheres of influence’ are not rigid, and allies and adversaries occasionally collaborate across supply chains. This reality underscores the increasing obsolescence of Western policy tools in responding to conflicts, as they are based on binaries that have become redundant.
Measures such as sanctions have inflicted significant harm on the local population in each country. But unlike members of the axis, ordinary citizens have had less capacity to adapt or recover. Consequently, the public endures a double burden as a result of these policies: first, the impact of the transnational economies on their own; and second, the damaging effects of Western policy. Some of these individuals had been striving to hold the regimes connected to the axis accountable, often through protests. However, in the absence of accountable and robust formal government systems and processes, many were left with no choice but to rely on axis members and allies for financial, medical and bureaucratic support.
The paper concludes that targeting the axis with measures such as sanctions has paradoxically damaged civil society, which is the strongest avenue for accountability – as the Syrian uprising against the Assad regime demonstrated. The US, UK and allied policymakers should first consider the harm that their own policies could inflict, then pursue efforts to hold Iran and its allies accountable to their respective populations. This can be achieved through three interlinked processes: (1) mapping the entire ecosystem to reveal the complex interplay between state and non-state actors, allies and adversaries that contributes to the axis’s adaptability across formal and informal economies; (2) engaging with brokers within the transnational network who can effectively represent and influence axis decision-makers to foster dialogue with Iran and its allies; and (3) focusing policy interventions on accountability mechanisms that can check the negative aspects of the axis’s mechanisms on the public. Critically, the axis’s ability to operate both locally and across borders means that any response to promoting accountability will have to do the same. For instance, any intervention aimed at fostering accountability in Beirut must be accompanied by a comprehensive plan for other regions connected to Beirut through the axis.
About this paper
This research paper is part of the Iraq and the Levant case study investigated by Chatham House for the Cross-Border Conflict Evidence, Policy and Trends (XCEPT) research programme, funded by UK International Development. The paper relies on primary sources collected through in-person and telephone interviews with political, economic and military elites, economists, analysts and the general publics in Iraq, Lebanon and Syria between 2021 to 2024. The authors conducted 33 research interviews and three focus groups in Iraq and Lebanon between April and September 2023.
