Iran denies collapse is close as US claims IRGC running out of money

The IRGC is Iran’s Islamic Revolutionary Guard Corps, a major military institution that supports Iran’s security and regional influence. Its Quds Force manages much of the external support for allied armed groups. This makes the IRGC central to Iran’s ability to project power beyond its territory, especially against US and Israeli interests.

For decades, the Quds Force has supplied money, weapons, components, training, and manufacturing expertise. United Nations experts and US officials say it has helped partner groups assemble or produce weapons locally. These groups include Hezbollah in Lebanon, the Houthis in Yemen, and Iran-backed factions in Iraq.

Financial pressure therefore targets more than Iran’s domestic military. The article reports claims that the IRGC cannot pay some soldiers, while allied groups face shortages. Yet Iran denies that collapse is imminent and says its economy remains resilient. Its regional network may continue, but with delayed payments, reduced resources, and greater reliance on local funding.

The United States claims it has used military and financial pressure to reduce Iran’s ability to fund its military network. US Central Command chief Brad Cooper said military attacks and a naval blockade of Iran’s southern ports had dealt severe blows. The pressure targets both Iran’s exports and accessible financial assets.

Cooper said the United States prevented Iranian crude exports and helped freeze cryptocurrency assets. These actions reduce money entering Iran and restrict funds that can be moved or spent. The article also describes sanctions, which have already contributed to inflation, currency depreciation, low-paying jobs, and economic isolation.

The reported result is financial strain rather than confirmed collapse. Cooper claimed the IRGC could no longer pay its soldiers and that Iran-linked groups were withholding payments. Iran acknowledges substantial problems but rejects the idea that its economy is collapsing. It says domestic capacity and economic resilience can withstand the pressure.

The United States says it has blocked a huge amount of potential Iranian oil income while restricting digital assets. US Central Command chief Brad Cooper put the prevented crude exports at least $25bn. He also said approximately $350m in cryptocurrency assets had been frozen.

These measures matter because oil exports and movable financial assets can provide money for military salaries, weapons, and allied operations. Blocking exports reduces revenue before it reaches Iran. Freezing cryptocurrency limits access to another pool of funds. Together, they are presented as ways to make the IRGC and regional groups struggle financially.

The figures are US claims, not independent confirmation in the article. Washington says they have contributed to unpaid soldiers and withheld payments among allied groups. Iran admits that sanctions, war, and the maritime blockade created serious problems, but its authorities deny that the country is nearing collapse or losing control within months.

Iran’s regional allies do not rely on one funding source. The article says they receive Iranian money, weapons, components, training, and manufacturing expertise. They also use businesses, oil exports, donations, and local resources. Some Iraqi factions are part of official security forces and receive government funding through the Popular Mobilisation Forces.

The movement of resources is often indirect. US Treasury allegations say allied commercial networks in Iraq sell Iranian commodities and distribute proceeds through intermediaries and exchange houses. Iran also provides stipends and in-kind support, including fuel products. The article reports that Iraqi money may flow toward Iran, the Houthis, and Hezbollah.

The groups’ financial health differs. Hezbollah and the Houthis are described as poorer because their national economies are badly broken. Iraqi factions have stronger access to state-linked revenue. Even so, financial pressure can delay salaries, restrict operations, and make groups depend more heavily on local resources and informal transfers.

Reduced funding creates pressure at both the center and the edges of Iran’s regional network. The article reports that the IRGC may be unable to pay its soldiers, while allied militias withhold payments from their own fighters. This can weaken morale, disrupt daily operations, and strain relationships between Tehran and its partners.

The mechanism is visible in the reported flow of money. Cooper said regional militias were allegedly funneling funds back to the IRGC instead of paying their soldiers. Hezbollah and the Houthis still receive stipends and fuel products, but their domestic economies are badly broken. Iraqi groups may have more support from government-linked resources.

The current reality is financial strain, not established collapse. Iran acknowledges serious problems caused by attacks and the blockade, while denying that its economy is collapsing. Continued shortages could reduce operational capacity and increase dependence on local funding, but the article does not establish that regional alliances have ended.

Iran may continue supporting regional allies because the network is central to its military and political influence. For decades, the Quds Force has provided money, weapons, training, and production expertise. Maintaining those relationships helps Iran support partners opposed to the United States and Israel, even when domestic conditions are difficult.

The article shows how this commitment works under pressure. Iran supplies stipends and fuel products to Hezbollah and the Houthis, while Iraqi commercial and security networks provide additional resources. Allied groups can also produce some weapons locally, reducing dependence on every shipment from Iran. These channels make funding harder to eliminate completely.

Iran’s economy is projected to contract 7.7 percent in fiscal year 2026-27, and authorities acknowledge substantial problems. Still, Central Bank chief Abdolnaser Hemmati called collapse an illusion. Iran says it wants to lift US pressure on its own terms, suggesting financial hardship may lead to adaptation rather than a strategic reversal.

Sanctions work by restricting trade, financial access, assets, or revenue. A blockade adds physical pressure by limiting goods or exports moving through ports. In this case, the United States says military attacks and a naval blockade reduced Iran’s crude exports, while sanctions and frozen cryptocurrency limited available funds.

The pressure reaches the government through practical shortages. Less export income can mean fewer resources for salaries, fuel, weapons, and allied payments. Iran’s economy already faces inflation, a depreciating currency, low-paying jobs, and isolation. However, allies can use local businesses, government-linked funding, donations, fuel deliveries, and indirect financial channels to keep operations going.

Economic pressure therefore does not automatically produce collapse or policy change. Iran says domestic capacities and resilience can withstand the strain. Its leaders may accept hardship while protecting strategic priorities. The article suggests the campaign has produced financial problems and unpaid personnel, but not yet the loss of Iran’s regional network or a confirmed government collapse.