Why regional players are certain to be monitoring latest events in Iran

As anti-government demonstrations persist in Iran, governments across the region are paying close attention. While there have been few explicit responses from Iran’s allies, neighbours or adversaries so far, Tehran’s deep involvement in the domestic affairs of many regional states means there is little doubt that leaders are watching closely — some with unease, others perhaps seeing an opening.

Protests have now continued for more than a week, with reports indicating that over 30 people have been killed and thousands arrested. The demonstrations began in Tehran on 28 December and have since spread across most provinces of the Islamic Republic, as reported by Al Jazeera.

The unrest flared shortly before the end of the year, when shopkeepers and bazaar traders in Tehran launched a strike as Iran’s currency fell to a record low against the US dollar.

Ongoing economic troubles have left the country grappling with annual inflation of around 40%, while the cost of basic goods such as cooking oil, meat, rice and cheese has risen beyond what many citizens can afford.

Protesters have expressed anger over a wide range of long-standing grievances, made worse by a historic drought that has inflicted severe damage on agriculture and strained the country’s water resources. 

Recent comments by US President Donald Trump, who threatened Iran’s leadership should the death toll continue to climb for protesters, have added further complexity to the challenges facing the government in Tehran. Iran’s neighbours have largely remained silent, but a DW article notes that they are nonetheless closely tracking developments with their own strategic interests in mind.

Saudi Arabia, UAE: ‘Frenemies’ for stability

Until fairly recently, Saudi Arabia and the United Arab Emirates viewed Iran primarily as a geopolitical adversary. Beyond the sectarian divide — Iran being majority Shiite Muslim while most Gulf Arab states are Sunni — geopolitical alignment has shaped relations. Iran has consistently opposed the US and Israel, while Gulf Arab states rely on Washington for security and many maintain at least informal working ties with Israel.

Historically, this dynamic fueled competition for influence across the Middle East. That calculus has shifted in recent years. Saudi Arabia severed diplomatic ties with Iran in 2016 but restored them in early 2023 through what is known as the “Beijing agreement,” brokered by China. While mutual distrust remains, the article notes that Riyadh now prioritizes regional stability, recognizing that economic growth is impossible amid sustained instability.

Despite fluctuations in relations, the UAE has remained one of Iran’s key trading partners — often described as providing a “lifeline” to the heavily sanctioned state — and reinstated diplomatic ties in 2022.

Iraq: Domestic interference

Iraq’s relationship with Iran is fraught, shaped by a shared 1,599-kilometer border and a brutal war fought between 1980 and 1988 under Saddam Hussein. Since Hussein’s overthrow in the 2003 US-led invasion, Iran has steadily expanded its political influence in Iraq.

Tehran backs several Iraqi paramilitary factions collectively known as the Popular Mobilization Forces (PMF). Initially formed by Shiite communities to combat the extremist group known as the “Islamic State” (ISIS, or ISIL), the DW notes that the PMF have since become deeply embedded in Iraq’s political and military structures. Some factions openly align themselves with Iranian religious and military leadership, citing Tehran’s financial, logistical and spiritual support.

As the article explains, PMF groups are considered part of Iran’s “Axis of Resistance,” a network opposed to the United States and Israel that also includes Hezbollah in Lebanon, the Houthis in Yemen and Hamas in Gaza. Backing nonstate actors is central to Iran’s “forward defence” doctrine, designed to keep conflict with its enemies away from Iran’s own territory.

Lebanon: Difficult diplomatic ties

Iran has long exerted influence in Lebanon through its sponsorship of Hezbollah, a Shiite Muslim group formed during the Lebanese civil war with the aim of expelling Western, US and Israeli forces.

Hezbollah operates not only as an armed movement committed to opposing Israel, but also as a broad social organization, offering welfare services and political representation within Lebanon’s multi-confessional parliament. Iran supplies the group with weapons, military assistance and funding for its social programs.

While Lebanon and Iran maintain formal diplomatic relations, ties between the two countries have become increasingly strained in recent years.

Syria: Battlefield enemies

Syria’s new government is unlikely to view Iran’s leadership favourably. During the country’s 14-year civil war, Iran and Iran-backed Hezbollah forces fought alongside then-president Bashar Assad. Tehran became deeply entrenched in Syria’s political, military and social spheres, with experts estimating that Iran spent more than $50 billion to preserve influence in a strategic Mediterranean stronghold.

The current Syrian leadership emerged from militia groups that overthrew the Assad regime, and many of its members likely fought Iranian forces or Hezbollah during the war.

Even so, Syria’s new authorities have indicated openness to future relations with Iran — provided Tehran refrains from interfering in Syrian internal affairs.

Israel: An opportunity?

Israel’s intelligence agency posted a message of support for Iranian protesters this week on its Farsi-language X account. “Go out into the streets together. The time has come. We are with you,” Mossad wrote.

Iran’s prosecutor general, Mohammad Movahedi-Azad, responded via state media that “any attempt to turn economic protests into a tool of insecurity, destruction of public property, or implementation of externally designed scenarios will inevitably be met with a legal, proportionate and decisive response.”

Just six months ago, Israel and Iran exchanged missiles and airstrikes in 2025, a confrontation that briefly drew in US forces, which struck several of Iran’s key nuclear facilities.

The Israeli government is likely to face “pressure from inside Israel in 2026 to exploit this window of opportunity to weaken Iran further,” Thomas Juneau, a University of Ottawa professor and regional expert, told UK-based outlet The New Arab in December.

Earlier this week, Israeli Prime Minister Benjamin Netanyahu was reportedly discussing the possibility of renewed strikes on Iran during a meeting with US President Donald Trump, according to sources cited by Axios.

Azerbaijan: Deep cultural ties 

Iran's northern neighbour Azerbaijan is deeply invested in the region's stability and peace, not only for its own interests but also due to its deep cultural ties to Iran. During the recent visit of a high-level government delegation led by Foreign Minister Abbas Araghchi to Baku, his Azerbaijani counterpart Jeyhun Bayramov praised the bilateral relations and highlighted the multitude of significant results achieved in 2025 in terms of trade and government cooperation. 

Bayramov reiterated that the two countries and peoples "share deep historical ties, grounded in friendship, cooperation, and brotherhood." While the state of relations is currently somewhat back to normal, the two neighbours, which are further tied together by being two of the few Shiite-majority countries in the world, have endured a bumpy road after a series of diplomatic crises and escalatory military drills near state borders in the last years. 

They find themselves on opposite sides on a range of geopolitical issues, most notably Iran's close political, economic and military ties to Armenia, which date back to the years of Yerevan's illegal military occupation of Azerbaijan's sovereign territories. At the same time, Baku's close ties to Israel in all major spheres, including economic and military, that are rooted in the two people's historic ties, remain an issue of frustration for Tehran.

By Nazrin Sadigova