Forward Defence: Iran's Asymmetric Strategy of Resistance

The core strategic dilemma of the Islamic Republic of Iran is that it is arrayed against forces far more powerful than itself. This includes at a minimum the United States, the world's sole superpower, Israel, the region's top military power, and Saudi Arabia, an oil-rich kingdom with advanced armaments. Against these adversaries, Iran has conducted various levels of warfare for the past four decades. At the time same, Iran is devoid of reliable and steadfast allies in this tough neighbourhood. Such a situation has pushed Iran to a state of relative strategic isolation. However, it has also spurred Iran to adopt a grand strategy that could offset this imbalance in economic and military power.

This imbalance is vast. Iran's nominal gross domestic product (GDP) is only 1.4% of the combined GDP of its adversaries; partially owing to economic sanctions that have stifled Iran's economy over the last several decades (Fig 1). The asymmetry in military expenditure is even more severe, with Iran's budget standing at only 0.6% of the combined total of its adversaries (Fig. 2).

Note: The figures do not render properly in dark mode.

To overcome its relative material weakness, Tehran has eschewed conventional conflict in favour of maintaining military and political influence in the Arab world through alliances with militant non-state actors - sometimes described as proxy forces. This includes Hezbollah in Lebanon, Hamas in Gaza and the Houthis in Yemen. By cultivating and supporting these groups, Tehran is able to manage events far from its borders and inflict pain on its enemies, whether this is Hezbollah firing rockets on northern Israel, the Houthis attacking Saudi oil facilities, or Iraqi groups attacking US occupation forces. Iran can thus deter direct attacks on itself by threatening to strike at its enemies' interests in the region. This doctrine has been termed "forward defence" (defaʿ-e afandi) with the various armed groups forming an "Axis of Resistance" (Mehvar-e Moqâvemat). Of course, though Tehran employs terms such as "defence" and "resistance", this doctrine is often seen as offensive in the countries in which Iran attempts to project power.

This post is divided into four sections. Section 1 will briefly trace the modern history of Iran and contextualise its animosity toward the US, Israel and Saudi Arabia. Section 2 will summarise the timeline of economic sanctions on Iran and survey some of the literature quantifying its impact on economic growth. Section 3 will cover in more detail the origins of forward defence and the formation of Iran's regional roster of allied groups. Section 4 will conclude with remarks on the sustainability of forward defence into the future.

1. Enemies Near and Far

1.1 Between Great Powers

The oil reserves and strategic location of Iran, formerly Persia, have long made it a country of interest for great powers. In the 19th century, it was the focus of competition between the Russian and British empires, sitting as it did between British India and Russian Central Asia. Persia's Qajar dynasty fought two wars against Russia in 1804 and 1828, and lost 10% of its territory and population as a result [1]. Then, in 1907, it was invaded and divided by Britain and Russia, who had combined to face the alliance forming between Germany, Italy and Austria-Hungary. This persisted until 1917, when Russia's new revolutionary government abandoned its sphere in the north, leaving Britain free to transform Persia into a sort of protectorate. This it did with an agreement in 1919 that pledged British military and infrastructure support in return for access to all Persian oil fields. At this point, Britain already had a longstanding interest in Persian oil. In 1909, the Anglo-Persian Oil Company was founded following the discovery of a large oil field. In 1914, the British government took a controlling interest, and in 1954, the company was re-named British Petroleum (BP).

Throughout this period, Persians chafed at the inability of the Qajar government to defend them and to properly develop the country into a strong state. Even the British were disturbed by the weakness and corruption of the Qajar dynasty, on whom it relied to manage the country. Hence, an army brigade led by brigadier-general Reza Khan launched a coup d'état that toppled the Qajar state in 1921, with some British support. Reza Khan would go on to establish the next ruling dynasty, as Reza Shah Pahlavi, in 1925.

The Pahlavi dynasty proved adept at state building and industrialisation; however, Iran would again find its fortunes turned by a world war. The Pahlavi dynasty was close to Nazi Germany; by 1941, Germany accounted for almost half of Iran's total trade, and it helped Iran develop scientific knowledge and modern technologies. Hence, when the Allies pressured the Shah to expel German residents from Iran, he refused. The problem was that Iran was crucial for the Allies. One reason was oil. Another was that Iran could serve as a valuable land route for Allied supplies to the Soviet Union, which had been resisting a colossal German invasion since June 1941. Supporting the Soviet war effort became a top priority for the US and UK, but German naval activity was hindering the traditional Arctic route. Hence, in August, Britain and the Soviet Union invaded neutral Iran, deposing the Shah and occupying the country until 1946.

While the occupation was a boon for the Allies, it was a calamity for Iranians. The country, now under the rule of Mohammed Reza Pahlavi (son of Reza Shah), suffered chaos, banditry, and economic hardship that led to high inflation and unemployment, as well as poverty and widespread hunger [2]. Hence, every day for five years, Iranians felt the dire consequence of Reza Shah's failure to protect Iran from foreign threats.

Even worse, the occupation would serve a prelude for Soviet attempts to dismember Iran to its own benefit. When the agreed deadline for Anglo-Soviet withdrawal came in early 1946, Stalin kept his forces in the country and supported the creation of two secessionist states in north-west Iran. The crisis was only resolved when the United States applied diplomatic pressure on the Soviets to withdraw, including by supporting the Iranian army, which managed to re-occupy the secessionist territories.

This incident instilled in the new Shah a deep fear of Soviet expansionism, and a belief that alignment with the West would protect Iran against its northern neighbour. However, as the Shah grew closer with the West, many Iranians veered in the opposite direction. The focal point of their distrust was the coup of 1953. The background was rising tension between Britain and Iran over the terms of the oil concession given to the Anglo-Iranian Oil Company. Iran demanded a larger share of oil revenue, devastated as it was after the war, and seeing Mexico and Saudi Arabia secure better terms from US companies. Eventually, the new, democratically-elected prime minister Mohammad Mossadegh decided to go further and outright nationalise the company.

To resolve the crisis, the CIA, MI6 and Iranian military elements collaborated to overthrow Mosaddegh's government in 1953 [3]. In this, they enjoyed the support of the Shah, who opposed Mosaddegh's moves to reduce him to a ceremonial monarch without real power. Hence, in the aftermath of the coup, the Shah saw an expansion of his authority, which would grow into autocratic rule. Now firmly in power, he fell under pressure from the British to negotiate an oil agreement, eventually granting a 50% share of Iranian oil to Western companies, including BP and Royal Dutch Shell.

1.2 Policeman of the Gulf

For decades afterward, the coup of 1953 would serve as a popular example of how the West, with the Shah's acquiescence, trampled on Iran's national rights and democracy. Nevertheless, the Shah continued to align with the US and its allies, seeing the coup as a demonstration of America's power and long reach. Hence, in the years after, the CIA would train Iran's secret police, SAVAK, and the Shah would purchase a slew of US armaments to modernise his military. In return, the Shah supported US interventions in the Third World - such as in Vietnam and the Dominican Republic - being one of the only Third World leaders to do so [4].

Moreover, the Shah proved himself useful to the US by acting to their mutual benefit at a time when British forces were withdrawing from the Gulf, and the US itself was embroiled in the Vietnam war. The Shah would thus be the "policeman of the gulf", helping to fend off Soviet threats in such a vital region of the world [5]. For example, in 1974-75, Iran, Israel and the US collaborated to arm Kurdish rebels who were fighting the Iraqi government. Iran was at this point engaged in a border dispute with Iraq, which was being backed by the Soviets. Hence, the US and Iran shared an interest in seeing Iraq weakened. In another instance in late 1973, Iranian military forces landed in southern Oman to help defeat an insurgency by the Marxist-Leninist Dhofar Liberation Front.

Under the Shah, Iran also developed very close military and intelligence relations with Israel and Turkey. For Israel, this was part of the "alliance of the periphery" strategy developed by founding prime minister David Ben-Gurion. To counter the threat posed by its Arab neighbours, Israel struck informal alliances with non-Arab states of the region that collectively surrounded the Arab world - Turkey, Iran, and Ethiopia. As a result, Mossad, SAVAK and Turkish intelligence exchanged intelligence and carried out joint operations. In 1977, Israel and Iran even agreed to jointly develop new advanced missile systems. All this occurred without any normal diplomatic relations between Israel and the other peripheral states [6].

The problem for the Shah was that Israel faced much popular disapproval within Iran. Nevertheless, he saw the relationship as valuable. He had an inflated view of Israel's influence in Washington, and therefore saw Israel as a path for his own influence as well - especially with the Kennedy administration, which was critical of his autocratic rule. Moreover, after the 1967 war, the Shah developed a great appreciation for Israeli military power, and saw the alliance as a way for both countries to balance against threats from the Arab world [6]. At the same time, he sought to maintain good relations with Arab leaders, especially Anwar Sadat of Egypt, going as far as allowing the Soviets to use Iranian airspace to resupply the Egyptian military during its 1973 war against Israel.

Hence, by aligning with Israel and the United States, at the same time as pursuing modernisation and development, Mohammed Reza Shah hoped to give Iran the allies and strength to survive in a turbulent region. However, this was not enough to save him from popular unrest. In pursuit of his policies, the Shah ran an autocratic state that brutally crushed any dissent, but in so doing, he helped foment the very bitterness that erupted into revolution in 1979.

1.3 Iran Alone

The revolution in Tehran also brought forth a revolution in Iran's grand strategy. While Iran had before sought security by aligning with the West, now it sought a fiercely independent foreign policy - "neither East nor West" - that would enable it to defend itself on its own terms. While Iran since 1979 has certainly been an Islamic republic, this aspect of its revolution and subsequent grand strategy is not at all an Islamic product, but rather a product of Iran's long history of foreign intervention and distrust of great powers. The Soviet dismemberment of 1941, the Anglo-American coup of 1953, and other events combined with inherent Islamic and leftist hatred of Westernism and imperialism to foster an enduring mentality of "going it alone". Indeed, when Iran's new leader, Ayatollah Ruhollah Khomeini, was asked after the revolution what he saw as its main benefit, he replied that "Now, all decisions are made in Tehran" [7].

If either side of the Cold War hoped to enlist the new Iran as an ally, they were soon disappointed. The Soviet Union was the first state to recognise the new government in Tehran; however, Khomeini remained distrustful of Soviet power, especially after they invaded neighbouring Afghanistan in December 1979. Moreover, the Soviets were close to the Tudeh Party, a Marxist-Leninist group within Iran, which the Islamic government banned and persecuted in its consolidation of power. As for the United States, it was deeply disturbed by repeated attacks on the US embassy in Tehran following the revolution. The first such attack was carried out by a Marxist-Leninist guerilla group, who took a US Marine hostage. The next two were carried out by students loyal to Khomeini, and hence, the Islamist faction of the revolution. The fact that these attacks were carried out by both leftist and Islamist elements puts to rest the argument that anti-Westernism in the new Iran was a purely Islamist product.

Apart from the West, revolutionary Iran managed to secure the enmity of both Israel and Saudi Arabia. Anti-Zionism has always been embedded within the political ideology of the Islamic Republic, which severed all ties with the Jewish state after 1979. Israel was an occupier of Muslim lands and an oppressor of Palestinian Muslims, hence Khomeini saw it as an imperialist outpost of the United States, casting it as the "Little Satan" to America's "Great Satan" [8]. Indeed, many Palestinians were overjoyed at the Islamic revolution, with PLO chairman Yasser Arafat being the first foreign leader to visit the new regime in Tehran [9]. Iranian hostility to Israel, which had both ideological and strategic elements, would eventually culminate in President Ahmadinejad's oft-quoted remark that Israel should be "wiped off the face of the earth" [10].

Meanwhile, Khomeini antagonised the Saudi royal family by undermining their claim to religious leadership, which had served as a source of legitimacy for the House of Saud since the 1740s. He criticised their custodianship of Mecca and Medina, the two holiest sites in Islam, and called for their overthrow, chiding them as un-pious and corrupt. In 1987, he disparaged the Saudis as “these vile and ungodly Wahhabis, […] Mecca is in the hands of a band of heretics.” In his last will, he wrote that "Muslims should curse and fight tyrants, including and especially the Saudi royal family". Iran's Speaker of the Parliament Rafsanjani added that "Iran must uproot the Saudi rulers… and divest the control of the shrines from them. […] The true revenge is to remove the colossal and precious wealth belonging to the Islamic world which lies under the soil of the Arabian Peninsula from the control of the criminal, the agents of colonialism” [11]. Such remarks are no small matter given that the Sunni Saudi kingdom contains a notable Shia minority that face discrimination, and are therefore open to Iranian influence [12].

Iran's exhortation to Muslims to topple their leaders deeply rattled not just Saudi Arabia but the entire region. Indeed, the Islamic Republic contained advocates of both exporting the revolution and the more pragmatic "revolution in one country", echoing similar debates in the early days of the Soviet Union. Khomeini himself did little to calm these fears, calling on Muslims in neighbouring countries to "liberate Islam and the Islamic countries from the clutches of the colonialists and those subservient to them", a call that disturbed Iraq and the Persian Gulf monarchies [13, 14].

Iraq's leader Saddam Hussein had particular reason to fear Khomeini. As a Sunni leader lording over a majority Shia population, he worried that his people would under the influence of the new Shia-fundamentalist government in Tehran. This fear, paired with an opportunistic desire to grab territory, drove Saddam to launch a full-scale invasion of Iran on September 22nd, 1980. The resulting war would last for eight years, wiping out a quarter of million Iranian lives, as well as destroying 60% of Iran's oil refining capacity, displacing two million civilians, and consuming two-thirds of national income by the final year of the war [15].

Overall, Iraq received far more aid during the war than the Iranians, despite the fact that Saddam was the original aggressor. This considerable military and financial aid came from the West, the Soviet Union, the Persian Gulf monarchies, and the Soviet Union - in other words, Iran's entire neighbourhood, and both sides of the Cold War. The Gulf states were driven by the desire to remove Iran's destabilising influence in their own territories, while actors such as China were driven more by commercial logic [16]. As for the US and its allies, enmity toward Iran was raised by attacks on the Western presence in Lebanon, which the US attributed to the Iran-backed militant group Hezbollah. In October 1983, suicide bombers attacked barracks in Beirut housing Western peacekeeping troops, killing 241 American and 58 French military personnel. In addition, throughout the period 1982-1992, militants kidnapped 30 Westerners in Lebanon, with some dying in captivity, including the CIA's Beirut station chief William Buckley. Needless to say, these events did not endear the West to the new Islamic Republic [17, 18].

As such, Western creditors such as the US and UK extended a total of around $35-45 billion in loans to Iraq, with another $30-40 billion from the Gulf states. In addition, Iraq made an estimated $54.7 billion of arms purchases during the war [19]. Of this, the Soviet Union accounted for a full 59% by trend-indicator value, including 2550 battle tanks, 1500 surface-to-air missiles and 30 fighter aircraft (Fig. 3). Meanwhile, France's sales included 300 Exocet anti-ship missiles, which Iraq would use to attack Iranian oil tankers later in the war [20].

Furthermore, the West failed to condemn Saddam for his use of chemical weapons during the war, killing tens of thousands of Iranian soldiers and civilians with mustard gas and nerve agent from 1983-88 [21]. In later years, Iran could only view this disinterest as cynical, given that the US would go on to condemn the use of chemical weapons by its enemies; namely, Saddam after he invaded Kuwait in 1990, and Bashar al-Assad in the Syrian civil war [22]. Even worse, these attacks were carried out with Western assistance and acquiescence. For example, West German companies played an enabling role by providing Iraq with the materials required to manufacture nerve agent, as well as machinery to be used for producing poison gas. While the West German government itself played no direct role, there are indications that these activities were well within the knowledge of West German intelligence [23, 24, 25, 26]. Furthermore, the CIA knew about the gas attacks since 1983, but continued to assist the Iraqis militarily, including by sharing valuable intelligence on Iranian troop movements, logistics and air defences [27].

That said, Iran was not completely without external aid, though its arms imports were generally far smaller than that of Iraq (Fig 4). For example, China armed both sides of the war, maintaining good relations with both while reaping commercial benefit from the weapons sales [16]. Even the Soviet Union, which supplied far more weapons to Iraq, still sent some arms to Iran, both directly and through intermediaries such as North Korea [28]. Perhaps more surprisingly, Iran even received some arms from both Israel and the United States (not shown in Fig. 4), including missiles and spare parts for Iran's large inventory of American-made equipment acquired under the Shah [11, 20]. At this time, Israel saw Iraq as a greater potential adversary than Iran, so it sought to prevent an Iraqi victory [29]. In fact, Israel-Iran cooperation went beyond arms sales, with Israel sending military advisors and Iran providing intelligence that would help Israel bomb Iraq's nuclear reactor at Osirak [6]. As for Washington, the Reagan Administration sought to use arms sales to Iran both to illegally fund the Contra rebels in Nicaragua, and to negotiate the freeing of hostages held by Hezbollah. As such, the US acquiesced in sales to Iran from allies such as France and Israel, circumventing an arms embargo imposed by the Reagan Administration in 1983 [30, 31]. Therefore, Iran did receive some assistance, but it was thin compared to the numbers lavished on Iraq.

US-Iran relations grew even worse after American forces became directly involved in the so-called "tanker war" that characterised the latter stages of the conflict. Over the course of the war, Iran partially financed its war effort with oil exports, which went entirely by sea. Hence, starting in 1981, Iraq began attacking ships bound for Iranian ports. Strikingly, there was no parallel Iranian response until 1984. By then, Iran had already destroyed Iraq's oil terminals, so it instead retaliated by attacking ships headed for the Arab Gulf states, which were financing Saddam's war effort [32]. In response, Kuwait requested the United States to protect Kuwaiti vessels, which required re-flagging them as US vessels [33]. Thus, the US Navy began protecting Kuwaiti ships bound for Iraq's allies, augmented by British and French forces who protected their own ships [34, 35, 36].

This mission put the US military in direct conflict with Iranian forces. In response to Iranian mine-laying operations, US Army helicopters directly attacked Iranian ships and oil platforms, significantly limiting Iran's ability to operate in the Persian Gulf [34]. Hence, even though Iraq had started the Tanker War, and in fact destroyed more vessels than Iran, it was Iran that was being targeted by the United States. The final slap in the face came in July 1988 when a US cruiser inadvertently destroyed an Iranian commercial jet, killing all 290 civilians onboard. Not all Iranians accepted the Americans' insistence that this tragedy was an accident. In fact, it has been argued this incident helped bring the Iranians to the negotiating table, with Rafsanjani stating that "I was certain Iran could not prevail in a war against both Iraq and the United States, while they have no shame to use chemical weapons and attack civilian planes" [37]. In any case, the only consequence for the commanding officers who shot down the plane is that they received service medals for their time in the Gulf [38].

Events after the end of the Iran-Iraq war in 1988 would only reinforce Iran's wariness of US power. In response to Saddam's invasion of Kuwait in August 1990, American and coalition forces made mincemeat of the Iraqi military. The same army that had fought Iran to a bloody stalemate was easily beaten back by overwhelming US firepower. Additionally, the demise of the Soviet Union in 1991 ushered in an age of American unipolarity, with no competing great power to whom Iran could turn in the event of US aggression.

Iran's fears of a US attack were further heightened after Washington finally obliterated Saddam's regime in 2003. Indeed, Iran had a few reasons to believe that "After Iraq, it was Iran's turn", in the words of Iran's first ambassador to post-Saddam Iraq [39]. First of all, President George W. Bush had lumped Iran together with Iraq and North Korea in his "Axis of Evil" speech in January 2002, a mere four months after the US invasion of Afghanistan. Second, the US was publicly raising fears of Iran's nuclear program, at the same time as it was preparing to invade Iraq under very similar pretexts.

Given that Iran was now surrounded by US forces to its east and west, president Mohammad Khatami sought to ward off US aggression by relaying to Washington a letter offering broad-based talks on a number of issues, which the Bush administration completely ignored. Khatami's overture was an example of a relative moderate within Tehran taking a risk with the United States against the counsel of hardliners including supreme leader Ali Khamenei. It backfired, strengthening the hardliners and leading Khatami to rue that "America had proved the supreme leader correct" to mistrust them. Khamenei would later say that "America is like a dog, if you back off it will lunge at you; but if you lunge at it, it will recoil and back off" [40]. A similar situation would occur in 2018, when the Trump administration unilaterally scrapped a nuclear deal arranged in 2015 by moderate president Hassan Rouhani. Afterwards, Khamenei reportedly said "As regards direct negotiations with the United States, it was my naïveté, I should not have allowed it then, and I will not allow it now" [41]. Such is the difficulty of cutting through the mistrust bred through decades of shadow war and sanctions.

2. The Economic Weapon

It is no exaggeration to say that Iran is the most heavily sanctioned country on Earth. In fact, almost continuously since the Islamic Republic was founded in 1979, it has been under some sort of economic sanction imposed by the US, EU or United Nations. In response to the hostage crisis in late 1979, US president Jimmy Carter imposed sanctions that blocked US-Iran trade, restricted financial transactions and froze Iranian government assets in the US. These were lifted with the 1981 Algiers accords, but then the Reagan administration imposed a fresh batch of sanctions in 1984 in response to barracks bombings in Beirut a year earlier, blocking financial aid and supply of any materiel that could be used in the war effort. Then in 1987, in response to attacks on Persian Gulf shipping, Reagan issued an executive order banning all imports of Iranian oil, goods and services to the US [42].

In the 1990s, the Clinton administration raised the stakes, frustrated by Iran's continued support for non-state actors such as Hezbollah. In 1995, it barred any investment or involvement by US entities in Iran's oil industry, and fully blocked US trade with Iran. Then, the 1996 Iran-Libya Sanctions Act broke new ground by imposing penalties on third-parties, punishing both American and non-American companies that invested in Iran's petroleum sector. Subsequently, the Bush era was characterised by sanctions on entities linked with Iran's nuclear program, as well as additional financial restrictions. These were expanded by Obama, who banned all third-party purchases of Iranian oil, transactions with Iran's entire financial sector, and business involvement with its energy and shipping sectors. These 2011/2 sanctions were the toughest up to that point [43].

The Bush and Obama eras was also characterised by the emergence of multilateral sanctions by the UN and EU. In a spate of resolutions from 2006 onward, the UN security council froze Iranian assets, mandated closer monitoring of Iranian banks, and imposed an arms embargo. From 2007, the EU also joined in with travel bans, asset freezes and some restrictions on trade [44].

Soon, however, this pattern was dramatically reversed by the signing of the Iranian nuclear deal (technically the "Joint Comprehensive Plan of Action", or JCPOA) in 2015. The 2013 presidential elections in Iran had brought to power Hassan Rouhani, a relative moderate, and he and foreign minister Mohammad Javad Zarif got to work negotiating a deal with the permanent UN security council members and Germany. The result was an agreement that lifted sanctions while committing Iran to roll back its nuclear capabilities. The deal brought major impacts in 2016; oil production rose, foreign investment came rushing in, inflation was brought under control, $55 billion of frozen assets were released, and Iran's trade with the EU increased by 42%. However, economic recovery was tempered by the reluctance of international firms and banks to do business in Iran, given the complexity of the compliance guidelines and the fear that further down the line, sanctions may be re-imposed [45].

These fears were certainly realised when, in 2018, the Trump administration quit the JCPOA and re-imposed sanctions targeting Iran's oil exports and financial sector, as well as the metals, mining, manufacturing, construction and textile industries [46]. This "maximum pressure" campaign persisted through both the Trump and Biden administrations, and continues unabated in Trump's second term [47].

Hence, sanctions have been long been a fixture of Iranian life. However, quantifying their effects is not always straightforward. Over the last half century, the Iranian economy has experienced a diverse array of shocks, from war to swings in the oil market (Fig. 5), so it can be tricky to isolate the particular effects of sanctions. Nevertheless, it is clear that restrictions on oil exports and investment have hurt the economy. Iran's public finances are particularly vulnerable, with oil accounting for around 40% of government revenue before the 2011 sanctions and less than 30% afterwards. These budget decreases have triggered a corresponding fall in public investment, especially in infrastructure. For example, in the two years after Trump's "maximum pressure" sanctions were imposed in 2018, public investment fell nearly 40%. In the same period, private investment fell by nearby 7%, discouraged by economic uncertainty around trade, inflation and exchange rates [48].

To quantify the impact of sanctions on GDP growth, numerous studies employ statistical or counterfactual methods, where models are formed of a hypothetical sanctions-free Iran [49]. One such study estimates that sanctions between 2011-2014 reduced Iran's real GDP by more than 17% compared to the counterfactual [50], while another puts the overall reduction from 2012-2016 at 19.1% [51]. Meanwhile, another study employed time-series analysis of sanctions intensity and macroeconomic indicators to estimate that over the period 1989-2019, sanctions reduced average annual growth from 4-5% to 3%. This means that GDP would have been more than 50% higher than current levels in the absence of sanctions [52]. Intriguingly, one study also ran counterfactual analysis on military spending, estimating that Obama's 2011/2 sanctions reduced it by an average of $9 billion from 2013 to 2015, amounting to almost 90% of the actual figure for these years [53].

Hence, sanctions have clearly exerted a negative impact on growth, pushing Iran's GDP below that of its adversaries in the region. However, there are indications that they have produced unintended effects. For examples, sanctions on oil have boosted Iran's non-oil exports and supported the rise of its high-tech and knowledge-intensive industries [52]. Furthermore, with Western markets cut off, these non-oil exports were largely deflected to non-sanctioning countries, showing the adaptability of Iran's economy [54]. These unintended effects have also infiltrated the political space. Some of the greatest economic losers of the sanctions are Iran's middle class, who are typically at the forefront of social, cultural and political reform. One counterfactual study estimates that this class would be 11 percentage points larger in the absence of the post-2012 sanctions [55, 56]. On the other hand, some argue that the greatest winners in Iran are the state and the hardline Revolutionary Guard, who can use their control of sanctions-evading networks to gain economic power at the expense of private sector actors [57, 58].

However, perhaps the clearest criticism of the sanctions is that they have so far failed to achieve their political objectives, which are, at the minimum, altering Iran's foreign policy, which currently acts against American interests in the region [59]. If anything, as we have seen, they have regularly strengthened the political position of hardliners, and driven Tehran to double down on its regional policies. Furthermore, by helping keep Iran in a state of material weakness, they bolster Tehran's dependence on the doctrine that has most successfully enabled them to overcome that imbalance: forward defence.

3. Seeking Strategic Depth

Iran's grand strategy has been designed to contend with powerful enemies from a position of relative economic and military weakness. Since Iran would stand no chance in a conventional conflict, it seeks to keeps its enemies at bay by instead confronting them in the Arab world through non-conventional means - in particular, through the use of non-state actors such as Hezbollah in Lebanon and the Houthis in Yemen. These groups allow Iran to project military and political influence beyond its borders, thus widening Iran's defensive perimeter to neighbours such as Iraq and Syria. It is therefore a classic example of a regional power seeking to gain strategic depth by controlling external areas seen as vital to its security, following the United States in the Western Hemisphere, Britain in Ireland, Russia in Eastern Europe, Japan in Korea, and so on. The difference is that unlike these prior examples, Iran does not enjoy a preponderance of conventional military strength. Therefore, it must resort to unconventional tactics.

The doctrine of forward defence relies on the use of allied non-state groups in foreign countries to provide deterrence and project power on behalf of Iran. These groups are typically found in weak, fragmented states that are easy to penetrate. They are also found in close proximity to Iran's adversaries - Yemen borders Saudi Arabia and Gaza and Lebanon border Israel, while Iraq and Afghanistan assume importance because they border Iran itself and hosted US bases for a time. Groups that explicitly target Israel have the added benefit of helping Tehran gain support on the "Arab street" by appealing to popular anti-Israel sentiment within the Arab world [60]. Lastly, a defining feature of all these groups is that they all share Iran's opposition to the regional status quo dominated by the US and its allies [61].

The origins of this doctrine can be found as early as the Iran-Iraq war of 1980-88. Here, the use of unconventional warfare was pioneered by the Islamic Revolutionary Guard Corps (IRGC), which, being a direct product of the revolution, distinguished itself from the regular military by its ideological fervour and appetite for martyrdom. For instance, during the war, its volunteer forces launched massive human wave attacks that absorbed Iraqi fire but left countless Iranians dead, including young boys [62]. In the 1980s, the IRGC also innovated the use of non-Iranian militia units to operate in foreign countries. This was the domain of the Qods Force, which was responsible for the IRGC's external activities.

One application of this strategy was in Iraq itself. Gathering Iraqi Shiite refugees and prisoners of war, the IRGC formed groups that would infiltrate back into Iraq to carry out bombings and assassinations. While these groups would remain marginal to the war effort, they would eventually provide Tehran with significant influence when they took power in post-Saddam Iraq [63].

3.1 Lebanon

However, perhaps the most impressive use of proxy forces was in Lebanon. In 1982, the Israeli Defence Forces (IDF) invaded Lebanon in order to root out the Palestine Liberation Organisation (PLO), which had been based there for more than a decade. In response, Iran sent more than a thousand IRGC commandos to build and train a militia force that would eventually become Hezbollah [63]. In contrast to the gruelling stalemate of trench warfare against Iraq, Hezbollah scored an impressive victory by pushing the Israelis out of Beirut in 1985, from where they withdrew to a security zone in southern Lebanon. Furthermore, while not formally accepting responsibility for the 1983 barracks bombings, Hezbollah do take credit for the consequent withdrawal of US and French forces from Lebanon in 1984 [64]. Hezbollah would continue to enjoy a dominant position in Lebanon, pushing out the IDF entirely in 2000, and establishing a "state within a state" with social services such as schools and healthcare facilities [65]. Having managed to fend off the US, France and Israel, Hezbollah would emerge as the shining example of Iran's forward defence [66].

3.2 Iraq

The irony of the fall of Saddam Hussein in 2003 is that while it struck Tehran with fear of encirclement by US forces, it also enabled it to significantly grow its influence in Iraq. The two Shia-majority countries share religious ties; after 2003, Iranian pilgrims began to visit Shia shrines in Iraq, and the IRGC would justify its presence there in terms of protecting these shrines [67]. Today, Iran exerts influence through a host of political parties and militia groups. These militias fought alongside the Iraqi army against the Islamic State in 2014-17, thereby proving their usefulness to the Iraqi state. All in all, it can be argued that the ultimate winner of the 2003 Iraq War was Iran; it was the US that displaced Saddam's brutal regime, but Iran took full advantage of the void to build its own political influence and ties. After all, when Qods Force commander Qassem Soleimani was assassinated by the US in January 2020, he was in Baghdad, on the way to meet the Iraqi prime minister [68].

3.3 Syria

In neighbouring Syria, the IRGC deployed in force to assist the regime of Bashar al-Assad after the civil war broke out in 2011. Ever since the Iranian revolution of 1979, Syria had been Iran's closest ally in the Middle East. It was the only Arab state that consistently sided with Iran in the Iran-Iraq War, providing it with diplomatic and military support, including arms transfers (Fig. 4). This alliance stemmed from shared hostility toward both Iraq and Israel, with whom Syria had fought wars in 1967 and 1973. Furthermore, Hafez al-Assad craved a sphere of influence in neighbouring Lebanon, and so facilitated Iranian access to create Hezbollah and expel the Israelis from 1982 onwards [69].

After the outbreak of the civil war in 2011, Iran intervened by sending IRGC and regular army units and by mobilising both Hezbollah and Shiite militias from neighbouring Iraq. Hence, it was the only foreign power that committed significant ground forces in Syria [70]. In addition, it helped Assad to create a new local militia called Jaysh al-Sha'bi ("the People's Army") and also formed militia groups from Afghan and Pakistani recruits  [71, 72]. As in Iraq, these forces fought back against Islamic State from 2014 onwards [73]. Iran also played a key role in triggering Russia's entry into the war in September 2015. Two months prior, Qassem Soleimani had visited Moscow and concluded an agreement whereby Iran and Russia would cooperate in Syria under a division of labour; Iran would continue the ground war while Russia would strike from the air. This joint intervention was crucial in tilting the war in Assad's favour - for a time [70].

3.4 Afghanistan

In Afghanistan, IRGC involvement dates back to the Soviet invasion, which began in December 1979. Though not part of the Arab world, Afghanistan is of high importance to Tehran as it shares a long border with eastern Iran. After the Soviets invaded, foreign funding for the Afghan resistance mainly came from the United States, Pakistan and Saudi Arabia - however, the IRGC did support rebel groups of Tajik and Shiite Hazari origin [74, 75, 76]. The Soviet withdrawal in 1989 removed this threat; however, the Sunni-fundamentalist Taliban that rose to power afterwards proved highly antagonistic to Iran, with Iran itself viewing it as a puppet of Saudi Arabia [77]. After the Taliban captured the city of Mazar-i Sharif in August 1998, it attacked the Iranian embassy, killing several diplomats and drawing Iran to deploy 70,000 troops along the border [78]. Moreover, Tehran was alarmed by the Taliban's commitment to build an oil pipeline through Afghanistan between oil-rich Central Asia and Pakistan, whose ports could link to world markets. This would allow Central Asian oil to completely bypass Iran, which had been contending for access to this resource . Hence, after the Taliban captured Kabul in 1996, the IRGC committed resources to supporting the anti-Taliban Northern Alliance, a coalition of rebel forces also aided by Russia and India [79, 80].

Common interests brought these actors to assist the United States in its invasion of Afghanistan after 9/11. For example, Russia opened its airspace to US transport aircraft, and helped the Americans establish support bases in Central Asia [81]. Meanwhile, Iran collaborated with the CIA in supporting the Northern Alliance, and provided vital intelligence to US forces for the invasion [77].

Despite this early cooperation, Tehran soon became apprehensive of the presence of US forces on Iran's eastern flank, fearing that they could be used to attack Iran's nuclear or military facilities. Such fears grew with evidence that US intelligence was using Afghanistan for reconnaissance missions inside the Islamic Republic [82]. Hence, to manage the political situation in Afghanistan, Tehran hedged its bets by giving some aid to the Taliban while simultaneously providing economic assistance to the Afghan state, as well as funnelling money to individual Afghan politicians [83, 84]. Iranian aid to the Taliban has included the provision of light arms and rocket-propelled grenades, as well as military training [85, 86]. However, it has been far more limited than Tehran's aid to groups such as Hezbollah and its Iraqi militias [76]. Again, these activities were organised by the Qods Force [87].

3.5 Yemen

The case of Yemen reveals how Iran could tap into existing disputes to increase its regional leverage. Here, the relevant partner is Ansar Allah - widely known as "the Houthis" after their founder, Hussein al-Houthi. The Houthis belong to Zaydism, a sub-group of Shiism, which hails from Yemen's mountainous northwestern regions. Railing against the political, economic and culture marginalisation of the Zaydis, the Houthis launched a rebellion in 2004. However, Iran showed little interest until the Saudis became involved in 2009. Saudi Arabia had been allowing the Yemeni military to stage attacks from its territory; in response, the Houthis launched attacks across the border, which in turn provoked Saudi airstrikes. After 2009, Iran began to give low-level support, including weapons shipments [61].

When the Houthis finally seized the capital in 2015, they were faced with a large-scale military intervention by Saudi-led coalition of countries, including Egypt and the UAE. In response, Iran greatly increased its support. Meanwhile, the intervention itself was proving to be an abject failure; the Houthis remained unmoved and the Saudis found themselves in a costly war from which they could not easily extricate themselves, all the while attracting international opprobrium for bombing funerals and school buses [88, 89]. In this context, the Houthis prove useful to Iran because they have both the means and motivation to strike at the Saudis. For example, on multiple occasions they have demonstrated their ability to successfully hit Saudi oil facilities [90, 91, 92].

Moreover, their strategic position on the Bab al-Mandab Strait gives them the coveted ability to disrupt international shipping - in particular, ships headed for the Suez Canal and the Mediterranean. For instance, after the Gaza crisis broke out in October 2023, the Houthis sought to "punish" Israel by attacking all ships linked to Israel (though in practice, they were more indiscriminate) thus inviting a military response from US and British forces [93, 94, 95]. Indeed the infamous Signal chat leaked in March 2025 concerned US airstrikes on the Houthis [96]. So, all-in-all, Iran supports the Houthis because they closely align on a revisionist regional agenda - including enmity with US allies - and because they have demonstrated an ability to put pressure on these enemies, which Iran sees as useful.

3.6 The Palestinians

Iran's relationship with Palestinian militant groups serves as an example, alongside the Taliban, of its willingness to support Sunni groups for geopolitical gain. These include Palestinian Islamic Jihad (PIJ) and Hamas. Out of the two, PIJ is closer to Iran, but politically less valuable, due to its relative lack of popular support compared to Hamas. Though Hamas was founded in 1987, close relations with Iran did not begin until 1992, when many of its fighters were expelled to Lebanon by Israel, and came under the training of Hezbollah. Since then, Hamas fighters have continued to train in Hezbollah camps and emulate their tactics, including the kidnapping of IDF soldiers and use of improvised explosive devices [97]. After Hamas seized power in Gaza in 2007, Iran boosted support, giving a reported $200 million a year in financial aid, as well as rockets, missiles and even the technical knowledge required to manufacture such weapons. As such, during its 2008-09 war against Israel, most of the weapons used by Hamas were provided by Iran [98]. Moreover, the IRGC admitted to giving Hamas the know-how to develop their Fajr-5 rocket, which proved capable of hitting Tel Aviv in their 2012 war against Israel [99]. As for the attack of October 7th, 2023, the available evidence shows that while Tehran was not directly involved in the initial attack, it certainly knew about the operation about to take place [100].

4. The Future of Forward Defence

All in all, Tehran's Axis of Resistance has enabled it to project power far beyond its borders and apply undeniable pressure on its adversaries, including Israel, Saudi Arabia and the United States. Hence, at the current trajectory of events, it appears that Iran's political bet on forward defence is here to stay. Relations between Iran and the West have been on a constant downward spiral since the days of the JCPOA. Trump's exit of the deal, assassination of Soleimani and bombing of Iranian nuclear facilities have only increased mistrust and given Iran every incentive to double down on its grand strategy of asymmetric conflict.

However, Iran's forward defence has faced severe setbacks in the past few years. Before the US bombing in June, Israeli air attacks managed to kill several senior figures - architects of Iran's grand strategy. These include Iran's highest ranking military officer Mohammad Bagheri, IRGC commander Hossein Salami and IRGC Aerospace force commander Amir Ali Hajizadeh, in addition to a number of prominent nuclear scientists [101].

Moreover, after the October 7th, 2023 attack on Israel, the IDF and Mossad managed to heavily degrade both Hamas and Hezbollah, Iran's two key allies on Israel's borders. Israeli forces killed Hamas leader Ismail Haniyeh and his successor Yahya Sinwar, in addition to its military heads Mohammed Deif and Marwan Issa [102]. Hezbollah also lost a number of senior figures, including longtime leader Hassan Nasrallah and his heir apparent, Hashem Safieddine [103]. They were further crippled by the pager attacks of September 2024 that killed dozens and wounded hundreds of Hezbollah members, causing chaos and confusion within the organisation [104]. In addition, Israel has also begun assassinating senior Houthi leaders, including Ahmed al-Rahawi, prime minister of the Houthi-led government, who was killed in an airstrike on August 28th, 2025 [105].

To top it all off, Assad's government in Syria fell to rebel forces in December 2024, removing Iran's closest regional ally and its land corridor from Iraq to Lebanon [106]. Assad's removal also allowed the IDF to completely destroy Syria's air defence capabilities and therefore open an air corridor to Iran for Israeli jets [107]. Indeed, such was Israel's air dominance in the June 2025 conflict that its warplanes were being refuelled mid-air in the skies over Syria in between bombing sorties [108].

These external developments may nudge Tehran's leadership to the negotiating table, or to double down on confrontation with the West. However, it will undoubtedly decide with an eye to the domestic sphere as well, and here, the picture is more ambiguous. A public opinion poll taken in 2024 reveals that 78% of polled Iranians blamed the country's economic problems on its foreign policy of confrontation, with 63% rejecting the notion that it advances the well-being of ordinary Iranians. 61% also favour reaching a new nuclear agreement with the West, with 67% supporting a normalisation of relations with the United States (incidentally, if given the choice between the US and the UK, or Russia and China, Iranians are exactly split on this). On the other hand, 67% disapprove of normalising relations with Israel, and 60% support the continuation of military aid to the Axis of Resistance (meanwhile, 49% support financial aid). Strikingly, 69% said that they felt safer at home as a result of Iran's foreign presence in the Middle East, and 66% felt safer as a result of Iran's support for proxy groups, hinting at the sheer difficulty of removing this great stumbling block to rapprochement with the West [109].

With such a complex picture, both regionally and domestically, it appears unlikely that Tehran's leadership will abandon forward defence anytime soon. Hardliners are firmly in charge, with Khamenei securely in the top seat and the IRGC lording over an enlarged portion of the sanctioned economy. Whether a deal like the JCPOA can happen again remains to be seen. Iran has an interest in economic relief and relations with the West. However, with the relative decline of the West's economic power and the rise of actors such as China, Iran may be able to find alternative partners in trade and development [110, 111]. After all, China has shown itself to be an invaluable backstop to heavily-sanctioned Russia, continuing to buy its oil at a time when other countries fear to do so under the threat of US sanctions [112]. Whatever the case, only time will tell whether Tehran can navigate the currents of geopolitics to secure its citizens a good and prosperous life.

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