Hezbollah faces worst financial crisis in years as tighter Lebanese banking squeezes group’s funding - report

Hezbollah is facing its most severe financial crisis in years, according to The New York Times, citing confidential documents and interviews with Lebanese, American and Israeli officials, as well as sources close to the Iran-backed Shiite group.

The newspaper reports that the war with Israel has severely weakened Hezbollah, which was already under financial strain following an earlier conflict.

Washington and Jerusalem have reportedly coordinated efforts to disrupt the group’s funding channels while increasing pressure on the Lebanese government to move toward its disarmament.

The financial strain is increasingly affecting Hezbollah’s extensive social-welfare network, a key source of its influence among Lebanon’s Shiite population. At the same time, the group is reportedly prioritizing military expenditures as it seeks to rebuild capabilities damaged by Israeli strikes.

Hezbollah spokesman Youssef al-Zein acknowledged that the group had suspended promised compensation for supporters, citing insufficient resources to assist the hundreds of thousands of people displaced by the war.

Before the conflict, the US State Department estimated that Iran provided Hezbollah with roughly $700 million annually, accounting for most of the group’s budget. Although Tehran has reportedly increased financial assistance in recent months, the additional funding is said to remain insufficient to cover the costs of the conflict and reconstruction.

The New York Times also reports that Washington supported the appointment of Lebanon’s new central bank governor, Karim Souaid, who has moved quickly to target financial networks allegedly linked to Hezbollah. Authorities have launched investigations into several money-transfer companies and tightened oversight of financial flows.

Under growing pressure, Hezbollah is reportedly relying more heavily on the informal hawala money-transfer system to move Iranian funds through countries including the United Arab Emirates, Turkey and Iraq.

US sanctions, Israeli strikes that have reportedly destroyed portions of Hezbollah’s cash and gold reserves, and increasing restrictions on its Al-Qard al-Hassan financial institution are placing unprecedented pressure on the group, potentially threatening its ability to sustain its political, social and military influence in Lebanon.