In the aftermath of two recent conflicts between Israel and Hezbollah, a concerted effort has emerged from Israel, the United States, and the Lebanese government to target the financing networks underpinning Hezbollah’s operations. Since late 2024, these efforts have intensified, focusing not only on military infrastructure but also on the group’s financial lifelines, particularly those linked to Iran’s support.

Early this year, Israeli airstrikes destroyed numerous branches of Al-Qard al-Hassan, a financial institution widely viewed as Hezbollah’s banking arm in Lebanon. Additional strikes targeted currency exchange businesses and gas stations believed to generate revenue for the group. These actions marked a shift in strategy, emphasizing economic pressure as a complement to direct military engagement.

Hezbollah, founded in 1982 and heavily backed by Iran, has long maintained a complex network that extends beyond its armed wing to extensive social welfare programs, including hospitals, schools, and financial aid. The group relies on Iran for a majority of its estimated $1 billion annual budget, with Washington estimating Iranian funding at around $700 million per year. However, the recent conflicts and international measures have strained Hezbollah’s resources, forcing the group to prioritize military expenditures over social services.

The situation grew more complicated after the fall of Syria’s government in late 2024, which severed a critical overland smuggling route that Hezbollah had used to receive funds and weapons. In response, Iran reportedly shifted to using air shipments through Beirut’s international airport. Under pressure from the United States, Lebanon suspended flights from Iran and removed Hezbollah-affiliated personnel from key airport positions, increasing security measures with American cooperation.

Simultaneously, U.S. and Lebanese officials have targeted Lebanon’s central bank, an institution characterized by its opaque operations and a largely cash-based economy that Hezbollah exploited to move funds. The appointment of Karim Souaid as central bank governor, reportedly influenced by the Trump administration, led to investigations into money service businesses and the sidelining of bank officials linked to Hezbollah. While large money exchangers faced increased scrutiny, Hezbollah shifted to relying more on informal hawala networks that move money through countries such as the United Arab Emirates, Turkey, and Iraq.

Despite these constraints, Hezbollah has adapted, creating new financial channels such as gold-trading companies to compensate for the loss of cash and foreign currency reserves damaged during Israeli airstrikes. The group has continued paying salaries to its fighters but has scaled back some social services and delayed compensation payments to civilians affected by the conflict. Hezbollah’s official spokesman, Youssef al-Zein, acknowledged the financial pressures but maintained that the organization was managing resources according to priority and remained capable of overcoming the challenges.

Al-Qard al-Hassan, which provides interest-free loans and compensation to many Hezbollah supporters, has faced bans from Lebanese banks and brokerages and is under increasing international pressure to be shut down. This development has left many beneficiaries, including families of fighters killed in recent conflicts, facing delays or cancellations in promised support. One Lebanese man from southern Lebanon described ongoing struggles to obtain medical assistance and financial help for rebuilding after the war.

While the full impact of financial crackdowns on Hezbollah’s long-term capabilities remains uncertain, the coordinated efforts by Israel, the United States, and Lebanese authorities signal a sustained campaign to disrupt Iran’s proxy influence in Lebanon through economic means alongside military action. Hezbollah and Iran have demonstrated resilience in adapting to these pressures, but the combination of regional instability and intensified oversight continues to constrain the group’s operational finances.