On December 28, 2025, after record-breaking economic strain gripped Iranian society, a protest movement emerged. The economic crisis had been brewing for months, beginning when UN and EU sanctions weakened Iran’s currency and prompted a shift toward electronic money, which in turn contributed to rising inflation, with prices increasing 7.9 percent between December and January. As daily hardships intensified due to dramatic price increases, the movement expanded nationwide in Iran, marked by widespread demonstrations. Although these protests were initially driven by economic grievances, they have since expanded to challenge the broader Islamic Republic, particularly its authoritarian rule and systematic repression. Given Iran’s enduring support for regional terrorist organizations, the collapse of the Islamic Republic could weaken these proxy groups, potentially reshaping the security landscape across the Middle East.
Throughout the 20th and 21st centuries, the Iranian people have repeatedly fought for political representation and civil liberties, yet since the Iranian Revolution the country has been governed by an anti-Western religious theocracy. In the recent protests, younger generations, mirroring broader global shifts to more progressive ideals, have chanted slogans such as “Death to the Dictator,” “Death to the Islamic Republic,” and “Pahlavi will return,” the latter signaling a desire to reclaim a pre-revolutionary national identity associated with a Western-aligned governance. While a transition toward a freer Iran would benefit its citizens, it would also significantly impact the wider region. Iran remains one of the most prominent state sponsors of militant groups in the Middle East, including Hezbollah and Hamas, providing these proxies with funding, weapons, and training to advance its strategic goals. Positive political change within Iran could weaken these networks and reshape the broader region’s security environment.
Iran has provided years of training and military aid to Hamas, assisted Hezbollah in Lebanon with advanced weapons systems, and supplied ballistic missiles and drones to Yemen’s Houthis. Through Iran’s support, these proxy groups have been able to expand their operations and incite violence at larger scales. The United States designates Iran as a leading state sponsor of terrorism, citing its extensive financial support for militant organizations. As the Iranian government faces continued domestic unrest, a weakening or collapse of the regime could significantly reduce the capabilities of these extremist groups that depend on its support. While diminishing extremist militias would likely improve regional security, political transitions also create instability that can provide openings for new extremist actors to emerge.
If the current protests in Iran result in political transition, the interim period could create temporary instability. In such environments, militant groups historically attempt to exploit uncertainty, as seen in Syria during the Arab Spring, when ISIS capitalized on state collapse. However, this outcome is unlikely in Iran. Unlike Syria, Iran maintains deeply entrenched state institutions that reduce the probability of complete fragmentation. Moreover, most Iran-backed organizations operate outside Iran’s borders limiting their ability to seize domestic political power. The protest movement’s demands, centered on civil liberties, personal freedoms, and reduced religious enforcement, also fundamentally contradict the ideological goals of extremist groups, further weakening the likelihood of their success.
Another possible outcome of political upheaval is the emergence of a more repressive leader. Periods of uncertainty surrounding succession tend to favor actors willing to consolidate power through coercion rather than reform, potentially preserving or even amplifying Iran’s support for militant proxies. As the saying goes, “the evil you know is better than the evil you don’t,” suggesting that attempts at change can sometimes produce outcomes worse than the status quo. However, the absence of a single, dominant opposition figure suggests that any transition would likely rely on collective or interim governance. A coalition-based leadership structure would prioritize domestic stability and legitimacy, reducing incentives to sustain external militant networks. Reductions in funding, weapons, and training could significantly weaken the operational capacity of regional proxy networks.
The prospect of political transformation in Iran would extend beyond domestic reform, directly affecting regional security. Considering the Islamic Republic serves as an important sponsor of militant proxy networks, a regime change could weaken the support sustaining these groups. While transitional instability poses risks, many of these terrorist organizations rely heavily on a secure, centralized state backing and would struggle to sustain their capabilities independently. Therefore, even a partial disruption of Iranian support could reduce these groups’ abilities significantly, and in turn alter the region’s security environment. The prospect of an improved regional security environment presents a transformative opportunity for the Middle East, one not seen in quite some time.
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