Less than a year after the assassination of Hassan Nasrallah, Hezbollah is facing an unprecedented financial crisis. Economic advisors within the organization have warned its leadership of an imminent “disaster” unless emergency funding is secured.
Adding to the pressure is a political and diplomatic campaign from both the U.S. and the Lebanese government demanding Hezbollah disarm. Could this signal the beginning of the end?
The collapse began with the killing of Nasrallah’s right-hand man, Fouad Shukr, in Beirut’s Dahiyeh neighborhood—a response by Israel to the rocket attack on Majdal Shams that killed 12 Druze children. Hezbollah tried to retaliate with rockets and drones but failed to make any real impact. Israeli intelligence and targeted strikes steadily unraveled the fearsome image Nasrallah had built.
One by one, Israeli operations exposed Hezbollah’s bunkers, launchers, and communications, leading to a massive strike a month later: over a thousand Hezbollah operatives were killed or disabled in a wave of explosions triggered by implanted devices. The group’s own senior officials admitted Nasrallah suffered a mental collapse. He was eliminated not long after.
A year later, Hezbollah is in historic decline. A foundation tied to the group recently stopped paying school tuition for the children of its fallen fighters. The U.S. has targeted Hezbollah’s financial branch, al-Qard al-Hassan, with heavy sanctions. Even in the group's Dahiyeh stronghold, it can’t afford to pay contractors to rebuild damaged buildings.
According to the Sawt Beirut newspaper, Hezbollah is now enforcing extreme austerity. Fighter salaries have been cut, compensation is delayed, and family benefits—such as healthcare and education—have dried up. Rent subsidies for displaced Shiite families are about to expire, and there is no money to extend them.
Iran, once Hezbollah’s lifeline, has slashed funding dramatically due to internal constraints and logistical hurdles. The fall of the Assad regime in Syria and the rise of an Islamist government hostile to Hezbollah have further dried up illicit funding channels such as weapons and drug smuggling. Meanwhile, Lebanon’s new leaders, under U.S. pressure, are cracking down on Iranian cash transfers via the Beirut airport.
Sawt Beirut reports Hezbollah's smuggling network can no longer cover its growing budget deficit. The financial strain is directly impacting Hezbollah’s military rehabilitation and long-term strength. Internally, pressure is mounting on Nasrallah’s successor, Naim Qassem, to solve the crisis.
At the same time, Washington and the Gulf states are demanding Hezbollah hand over its weapons in exchange for economic aid. Qassem has refused, but the pressure is rising. His goal now is simple: survival at any cost. Yet rivals inside Lebanon see his weakness—and Israel continues to exploit it, eliminating Hezbollah operatives daily despite the declared ceasefire.