Israel and US Launch Extensive Campaign to Cripple Hezbollah’s Financial Network
Over the past two years, Israel and the United States have conducted an aggressive campaign targeting Hezbollah’s financial infrastructure. According to a New York Times report, Israel’s initial strikes in the recent conflict focused on banks linked to Hezbollah in Lebanon, destroying over a dozen branches accused of serving as the terror group’s financial hubs. Additional airstrikes targeted money exchangers facilitating Iranian funds to Hezbollah and fuel stations generating revenue for the group.
This campaign is part of a broader effort involving the Trump administration and the Lebanese government to disrupt Hezbollah’s funding channels, especially those originating from Iran. The operation accelerated after Hezbollah lost a critical smuggling route following the fall of Assad’s regime in Syria in late 2024. Iran attempted to maintain funding by covertly transferring cash through Beirut’s airport, controlled by Hezbollah, using civilian flights and even Iranian diplomats. Lebanon responded by suspending all flights from Iran and replacing Hezbollah-affiliated airport staff with security personnel cooperating with U.S. officials.
Washington also pressured Lebanon’s central bank to reform its opaque financial practices. The newly appointed governor, Karim Soweid, swiftly removed officials suspected of Hezbollah ties, launched investigations into major financial service companies, and tightened oversight on money transfers. Despite these measures, Hezbollah increasingly relied on a less regulated network of money changers moving funds through the UAE, Turkey, and Iraq. The U.S. Treasury imposed sanctions on Lebanese money exchangers last November and exposed Hezbollah’s use of gold trading companies to raise cash, especially after Israeli airstrikes depleted much of Hezbollah’s foreign currency and gold reserves.
The economic pressure has forced Hezbollah to cut back on its extensive welfare network supporting its Shiite base in Lebanon, although salaries for tens of thousands of operatives continue to be paid. Hezbollah’s spokesman acknowledged in May that compensation payments were halted and that the group prioritized military spending amid the financial strain. The U.S. State Department estimated Iran’s annual funding to Hezbollah at around $700 million, constituting most of the group’s $1 billion yearly budget. Despite increased Iranian support in the past year, Hezbollah struggles to cover its war-related expenses.
This coordinated campaign combining military strikes, financial sanctions, and Lebanese reforms represents a significant effort to weaken Hezbollah’s operational capabilities by targeting its economic lifelines.
