[Revolutionary Guards Inc.]③Unyielding in External Wars for Profit... "Unlikely to Relinquish Hormuz"

Intervening in the Syrian Civil War for Reconstruction Profits
Focusing on Revenue from Control Over the Strait of Hormuz

Editor's NoteAmid the ongoing war between the United States and Iran, attention is turning to the Islamic Revolutionary Guard Corps (IRGC), which has emerged as a central pillar of the Iranian regime. Officially, the IRGC is a military organization responsible for Iran’s military and defense. In reality, however, it functions as a conglomerate controlling over 40% of Iran’s economy. Its sprawling expansion was enabled by the unwavering support of former Supreme Leader, Ayatollah Seyyed Ali Khamenei. However, since his death in a U.S. airstrike in February, the IRGC has become an independent entity, beyond the control of even the Iranian government. The Asia Business Daily examined the true nature of the IRGC and its potential impact on future negotiations with the United States.

The marching of the Honor Guard of the Islamic Revolutionary Guard Corps (IRGC). Brookings Institution

The Islamic Revolutionary Guard Corps (IRGC) was able to expand its reach across multiple sectors under the unwavering backing of Iran’s Supreme Leader. However, following the continuation of U.S. sanctions against Iran since 2017, the IRGC has evolved into a self-sustaining organization no longer bound by the Supreme Leader's directives. Notably, as U.S. sanctions reduced Iran’s oil revenues, the IRGC expanded its presence in the Syrian civil war, acquiring rights to various reconstruction projects and resource extraction, fueling its further growth. Experts suggest that given this pattern, the IRGC is unlikely to relinquish control over the Strait of Hormuz—one of the most contentious issues in ceasefire negotiations with the United States. To increase the likelihood of an end to the conflict, they argue that pressure on the IRGC, separate from the Iranian government, must be intensified.

Intervention in Syrian Civil War for Resource Gains... Expelled After Assad Regime Collapse

Reuters Yonhap News

According to Arab News, a Saudi Arabian outlet, the Syrian government began a joint investigation with the Saudi government in early April into Syrian companies linked to the IRGC, aiming to weaken their influence. Since the outbreak of the Syrian civil war in 2011, the IRGC supported the then-ruling Assad regime and became involved in various reconstruction projects and resource development in Syria.

According to the Syrian Observatory for Human Rights (SOHR), a human rights group in Syria, the IRGC became fully involved in the Syrian civil war from 2015, providing support with over 10,000 troops. They assisted in training the Assad regime’s regular army, operating drone and missile bases, and supplying weapons. Additionally, the IRGC extended loans amounting to 50 billion dollars (about 75 trillion won).

In return, the IRGC secured the rights to develop phosphate mines, a primary ingredient for fertilizer. Its holding company, Khatam al-Anbia Construction Group (KCB), also won contracts for reconstruction projects in Syria.

Additionally, in 2017, the IRGC established Wafa Telecom, a Syrian mobile telecommunications company, and expanded its operations with the support of the Syrian government. In just seven years since its founding, by 2024, Wafa Telecom had grown to become the third-largest mobile carrier in Syria.

According to the Netherlands-based Clingendael Institute, the IRGC has been actively pursuing profit-oriented businesses since the early 2000s and began intervening in Middle Eastern civil conflicts to secure revenue. When hardline politician and former IRGC member Mahmoud Ahmadinejad became president in 2005, a large number of state assets were transferred to the IRGC. After U.S. sanctions resumed in 2017, the IRGC aggressively invested in civil wars and reconstruction projects in neighboring countries.

Since the Iraq War in 2003, the IRGC has also been active in Iraq’s reconstruction efforts. According to CNN, construction companies under Iran’s KCB have been involved in reconstruction projects in the Shia-dominated southern regions of Iraq, with the scale of these projects reportedly reaching 70 billion dollars (about 105 trillion won).

Even Khamenei Failed to Control the IRGC... Further Expansion of Profitable Businesses

AP Yonhap News

Even former Supreme Leader Ayatollah Seyyed Ali Khamenei attempted to rein in the IRGC’s indiscriminate business expansion during his lifetime. However, even his intervention proved ineffective. According to the Middle East Institute (MEI), a U.S. non-profit think tank specializing in the Middle East, Khamenei ordered the IRGC in January 2018 to sell off its financial and commercial assets unrelated to its core mission. In response, the IRGC promptly issued a statement asserting, "All of the IRGC’s economic activities are conducted within a legal framework and are related to its mission."

From 2017 to 2018, Iran experienced massive protests. As U.S. President Donald Trump began his first term and intensified sanctions against Iran, the Iranian economy deteriorated sharply. Public outrage grew against the IRGC’s monopoly over numerous businesses and economic interests. Khamenei, in response to this public sentiment, ordered the IRGC to divest its assets. However, the IRGC refused.

MEI noted, "Once the intense protests in Iran subsided, the IRGC later claimed it could not find or recall any such order from Supreme Leader Khamenei regarding the sale of its financial and commercial assets. Instead, the IRGC expanded its businesses through its subsidiaries, not only within Iran but also across neighboring countries."

However, a recent joint report by the Institute for the Study of War (ISW) and Critical Threats Project (CTP) at the American Enterprise Institute (AEI) pointed out, "Since the IRGC elevated Mojtaba Khamenei to Supreme Leader, it has taken the lead in Iran’s decision-making. Civilian bureaucrats have been excluded from these decisions and participate in negotiations only in a limited capacity."

As the IRGC took control of all profitable businesses, Iran’s economy lost even more of its growth momentum. Dr. Sara Bazoobandi of the Institute for Security Policy at Kiel University in Germany told the Washington Post (WP), "Companies linked to the IRGC are incompetent and corrupt; they are not organizations with outstanding business acumen or ideas. Their success has come through force and intimidation. As the IRGC’s grip on the economy has grown, Iran’s economy has become even more isolated and inefficient," she criticized.

IRGC’s Reluctance to Relinquish Control Over Hormuz..."Difficult to Reach Agreement Without Further Conflict"

Reuters Yonhap News

After the war, the IRGC’s new focus has become the Strait of Hormuz. The IRGC is seeking to strengthen its control over the strait, which is expected to be a major source of revenue after the conflict. On May 12, Mohammad Akbarzadeh, Deputy Director for Political Affairs of the IRGC Navy, said in an interview with local Iranian media, "The narrow boundaries of the Strait of Hormuz have expanded into a broad operational area. The zone has widened from 20–30 miles (32–48 km) to 200–300 miles (320–480 km)," indicating a desire to significantly expand their control area around the Strait of Hormuz, including the Gulf of Oman.

Additionally, under the IRGC’s leadership, the Iranian government is moving to establish an agency to collect transit fees for the Strait of Hormuz. According to CNN, citing shipping industry sources on May 7, Iran is creating a new government agency called the Persian Gulf Strait Authority (PGSA), which will monitor vessels passing through the Strait of Hormuz and impose transit fees.

Some observers warn that if the current standoff continues without further full-scale conflict, the IRGC could use these transit fees as a new source of funding and prolong the confrontation. Foreign Policy, citing Iranian experts, reported, "The IRGC still believes it can hold out until President Trump’s term ends and may indeed pursue such a protracted standoff. Unless there is a strong enough offensive to shake the IRGC’s hardline position, it will be difficult to reach an agreement, and prolonged conflict appears increasingly likely."

This content was produced with the assistance of AI translation services.