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year, Mazarei says, thanks largely to Iranian expertise at smuggling, honed during 40 years of various international sanctions regimes.

      Iran also continues to export oil to China, which is defying Trump’s sanctions by using its renminbi currency as payment. Analysts tracking the movements of Iranian tankers say Tehran also is believed to be selling its oil to Turkey and Syria, illustrating the challenge Trump faces in zeroing out Iranian oil exports.¹³

      “Iran is the most experienced country in the world in resisting sanctions,” says Sayed Hossein Mousavian, an Iranian policymaker and nuclear negotiator and now a visiting research scholar at Princeton University.

      Iranian manufacturers and merchants have eased the impact of the sanctions somewhat by finding other suppliers willing to risk doing business with them, says Esfandyar Batmanghelidj, an economist and publisher of Bourse & Bazaar, a London-based Iranian business journal. The government also has been able to stabilize the currency and slow inflation, he adds, by creating financial mechanisms that encourage Iranian exporters to repatriate their dollar earnings from abroad.

      “The economy is much more resilient than Washington would have us believe,” says Batmanghelidj. “The question is not whether there’s an economic crisis today; it’s whether that crisis remains in place a year from now. Only then will we know whether the sanctions are going to have a full impact on Iran’s decision-making.”

      Has the expansion of Iranian influence shifted the balance of power in the Middle East?

      Since its 1979 revolution, Iran has sought to fill the various power vacuums that emerged from the Palestinian-Israeli conflict, the U.S. invasions of Afghanistan and Iraq and ongoing upheavals in the region.

      Iran’s moves into these troubled areas reflect not only a drive for greater regional influence but also the latest chapter in a centuries-old struggle for supremacy within Islam between the Shiite sect, centered in Iran, and the Sunnis, led by Saudi Arabia. And layered on top of their religious rivalry are the long-standing ethnic tensions between the region’s Arab populations and the predominantly Persian Iranians.

      Analysts say Iran has expanded its influence relatively cheaply by cultivating mostly Shiite militias across the region to resist the Sunni-led Arab monarchies in the Persian Gulf, which have been aided by the United States and Israel. In Syria, Saudi Arabia tried unsuccessfully to blunt Shiite proxies by backing a hard-line coalition of Sunni extremist groups that included Jabhat al Nusra, the Syrian affiliate of al Qaeda.¹⁴ Iranian-supported militants now form a network of formidable proxy forces, extending from Lebanon on the Mediterranean Sea, across the vast Levantine steppe of Syria and Iraq and down to Yemen on the southern tip of the Arabian Peninsula.

      “They’re building these militias, training them, arming them, making sure there’s a certain degree of loyalty to Iran,” says Trita Parsi, author of several books on post-revolutionary Iran. “These alliances have a common religious bond and a strong ideological bedrock. They’re more than just temporary political marriages based on money.”

      Saudi Arabia’s efforts to counter Iran by financing its own proxy forces have largely failed because many of those groups, such as al Qaeda, also want to overthrow the Saudi monarchy, Parsi adds. “Within six months, those forces are using those funds to attack Saudi Arabia,” he says.

      But Iran and its proxies have yet to prevail over Israel. “The Iranians have a healthy respect for Israel’s ability and willingness to respond militarily to Iran’s provocations,” says Jarrett Blanc, a former senior State Department official who oversaw implementation of the 2015 nuclear accord. “So they often pull back their proxies in Syria and Lebanon” when they come under Israeli attack. Such redeployments appear to be tactical retreats, aimed at preserving resources to fight another day, he says.

      Michael Connell, director of the Iran studies program at the U.S. government’s Center for Naval Analyses in Washington, said Tehran’s support of proxies stemmed from its recognition after the 1980-88 Iraq-Iran war that its regular army, hobbled by international sanctions imposed after the 1979 Iranian revolution that prevented military modernization, was no match for technologically superior enemies. So Iran cultivated Shiite proxies to confront common enemies, teaching them what Connell called a “deterrence based model of attrition-based warfare,” characterized by suicide bombings and small attacks to raise opponents’ risks and costs.

      “The goal is to inflict a psychological defeat that inhibits an enemy’s willingness to fight,” Connell said.¹⁵

      Iran has armed and trained these proxies in:

       Lebanon—Hezbollah (Party of God), a Shiite group founded after Israel invaded that country in 1982. The group has launched guerrilla attacks and suicide car bombings against Israeli and U.S. facilities in Lebanon, eventually driving the United States and Israel out. The group today has more than 100,000 missiles that pose a serious threat to Israel, experts say, and has formed a powerful political party in Lebanon’s parliament.

       Gaza Strip—Hamas, an Islamist Palestinian organization that rules the area, and Islamic Jihad, another militant Palestinian group, even though both are Sunni.

       Yemen—The Houthis, members of the Zaydi Shiite sect, who toppled the government in 2014 and seized its weapons and medium-range missiles. Accusing Iran of engineering the overthrow, the Saudis have led an Arab military coalition with U.S.-supplied weapons and intelligence support in a deadly campaign to restore the ousted government to power. Some experts say the Houthis initially had no military relationship with Iran but later turned to Tehran and Hezbollah for help after the Saudi-led offensive triggered a dire humanitarian crisis. Houthi missiles repeatedly have struck inside Saudi Arabia, even reaching the capital Riyadh. The Houthis claim they launched the September attack on Saudi oil facilities.

       Syria—Hezbollah fighters, often called “Iran’s Foreign Legion,” who poured across the border into Syria in 2012 at Tehran’s request to help embattled President Bashar Assad, a member of the Shiite Alawite sect. Since then, Hezbollah has helped train, arm and fund more than 100,000 Shia fighters, who have fought alongside Syrian government troops and with Russian air support against Sunni rebels, some of which are backed by the United States and Saudi Arabia.16

       Iraq—Shiite militias that killed hundreds of American troops during the eight-year U.S. occupation of that predominantly Shiite country. Later, fighting as government forces—ironically with U.S. air support—these groups helped expel the Islamic State, an extremist Sunni group that had overtaken huge swathes of northwestern Iraq in an effort to establish a religious state known as a caliphate.

      An Iraqi woman protests corruption in the Iran-supported government in Baghdad in November 2019. Militias backed by Iran have joined Iraqi government forces in attempting to suppress such demonstrations.

      HUSSEIN FALEH/AFP via Getty Images

      Analysts say that after U.S. forces toppled Iraqi leader Saddam Hussein—a Sunni and Iran’s arch enemy—in 2003, the election of a pro-Iranian, Shiite-led Iraqi government ended Baghdad’s role as a regional check on Iran and swung the region’s balance of power toward Iran.

      The Trump administration says U.S. sanctions have constrained Tehran’s ability to fund its proxies in the region. “We can’t overstate the significance of this development,” says the State Department’s Hook, citing a Hezbollah appeal for donations in March and reports of financial shortages affecting pro-Iranian groups in Syria, Iraq and the Gaza Strip. “We’re making a lot of progress in that direction.”

      But Middle East experts say Hezbollah routinely seeks donations and was doing so before Trump imposed his sanctions. And Tehran’s support for its proxies remains a top strategic priority, they say. “We haven’t seen

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