The Iranian economy has been battered by extensive sanctions and corruption, leading to a significant decline in oil exports, which in turn has impacted funding for its proxy groups.

As the situation stands, Iran faces a critical choice between maintaining its resistance approach or shifting towards economic development to regain regional influence and stability.

Iran's internal divisions and economic dysfunction have severely undermined its geopolitical ambitions, making it increasingly difficult to convert regional influence into sustainable economic power.

The attacks on Israel on October 7, 2023, marked a pivotal moment, disrupting Iran's regional strategy and resulting in heavy losses for Hizballah and other Iranian proxies.

Hizballah, Iran's key ally in Lebanon, is reportedly at its weakest in a generation, suffering continuous assaults from Israel, which has led to significant admissions of loss from Iranian military leaders.

This current state of affairs starkly contrasts with General Qasem Soleimani's 2019 assertion of easy access from Tehran to Beirut, highlighting Iran's retreat from its previous positions.

Despite initial optimism for reviving the nuclear deal under President Biden, negotiations have stalled, leading to a less aggressive pressure campaign compared to the previous administration.

Iran's gray zone strategies, which involve asymmetric warfare and the use of proxies, are in decline as the country's internal dysfunction hinders its ability to project power effectively.

Economic instability in Iran has led to a decline in public support for its regional strategies, creating further challenges for the ruling political system.

The interplay between Iran's geopolitical strategies and its economic health is critical; without significant reforms, Iran's regional ambitions are increasingly at risk.

Iran's supply lines to Lebanon now depend on Sunni-majority Syria, which is facing significant instability due to the crumbling Assad regime.

Iran's involvement in the Ukraine conflict, particularly its supply of drones to Russia, has further strained relations with the EU and complicated ongoing nuclear negotiations.