Following the Shia group Hizbullah’s success in consolidating power inside Lebanon’s parliament after the recent elections, the US Treasury Department imposed new sanctions on the Iran-backed group and its allies last week, including secretary-general Hassan Nasrallah and other key figures.

In a statement, the US Treasury said the punitive measures were directed particularly at MP Nasrallah Naim Qassem, Chairman of Political Committee Ibrahim Amin Al-Sayed, head of religious committee Mohamed Yazbek, and Nasrallah’s assistant for political affairs Hussein Al-Khalil.

The US sanctions had earlier targeted Hizbullah’s financial networks in February, when six group members and seven affiliated financial institutions were sanctioned.

A White House official said the sanctions were part of a campaign against Hizbullah and were aimed at curbing the regional influence of Iran. The latter gives the group $700 million a year to finance its operations around the region.

White House officials also said the Trump administration was changing its approach towards Hizbullah and ending the “lenient attitude” adopted by former president Barack Obama after the signing of the nuclear agreement with Iran in 2015.

On 8 May, US President Donald Trump decided to withdraw the US from the Joint Comprehensive Plan of Action (JCPOA), known as the Iran nuclear deal.

The names on the list of US sanctions would have included more Hizbullah allies had it not been for major international mediation efforts earlier this year.

In line with the US sanctions, Saudi Arabia announced the inclusion of 10 key Hizbullah members on its list of those supporting terrorism. It said the group’s Shura Council was its decision-maker and the de facto voice of Iran’s supreme guide in Lebanon.

Besides Nasrallah, Qassem, Yazbek, Khalil and Al-Sayed, Saudi Arabia added the names of Talal Hemyeh, Ali Youssef Sharara, the Spectrum Group, Hassan Ibrahimi, and the Maher Company for Trade and Construction to its list of those supporting terrorism, accusing them of financing Hizbullah from within the kingdom’s territory.

The Saudi move was unexpected before parliamentary consultation had taken place in Lebanon and a new government had been formed under the leadership of Lebanese Prime Minister Saad Al-Hariri guaranteed by Saudi Arabia.

The move will no doubt make Al-Hariri’s task of forming a new government more difficult and will delay its seeing the light.

The US and Saudi sanctions will also likely trigger reactions from Hizbullah and Iran, with Iran likely to try to find some way to retaliate and Hizbullah stepping up efforts to increase its share in the Lebanese government.

Hizbullah has in the past contented itself with holding two service-oriented portfolios in the Lebanese government, among them youth and industry, while working on securing a bigger share for its allies.

It is now expected to demand three ministries because the US and Saudi administrations have targeted Nasrallah and prominent Hizbullah figures directly in addition to financial figures who have no direct ties with political circles.

Saudi Arabia has also declared that it considers the group’s political and military wings to be identical in what may be a Saudi rejection of Hizbullah being part of any future government in Lebanon. Should this happen, the kingdom might declare Lebanon to be a country that provides cover for terrorism.

Hours before the announcement of the US and Saudi sanctions, US officials stated that the US would continue supporting Lebanon and its institutions and that cooperation programmes would remain in place despite the election results.

They added that Washington was placing its bets on the role of the Lebanese army, which would receive additional aid worth $250 million to help it consolidate its power on the ground, especially in the south of the country.

The US and Saudi sanctions might be the first in a series of retaliatory measures to the results of Lebanon’s legislative elections. Others may follow, since the Saudi statement also mentioned measures to freeze the assets of those on its list in addition to anyone related to them or to the group.

The developments will affect the process of government formation in Lebanon, where Hizbullah and its allies have the majority of the seats in parliament at more than half of the 128 seats.

The group could appoint one of its close allies to form a new government, but it may choose not to do so depending on how the present storms play out.

It also remains to be seen how Lebanese President Michel Aoun, a Hizbullah ally and member of the Free Patriotic Movement, and head of the Future Movement Al-Hariri will react to the developments. For Al-Hariri, the US and Saudi sanctions augur ill for his return at the helm of the government.

How Hizbullah will react to the sanctions is unknown, even though the group is used to such procedures and is already enrolled on certain terrorist lists.

The timing of the sanctions, in line with Washington’s withdrawal from the JCPOA and after the announcement of the results of the Lebanese elections, makes them a punishment for the group whose major figures maintain a distance from the world’s financial order.

Lebanese media reports said Hizbullah might respond by putting forward one of its members, mentioned on the sanctions list, to head a government ministry.

Lebanese ministerial sources told the media that “the US escalation against Hizbullah will mainly reflect not on the government’s formation but on its preparations for ministerial appointments.”

“The announcement of the sanctions at this juncture is a message that the development and investment projects promised at the Cedar I Conference in France and other forms of aid might now be postponed pending the government’s formation,” they said.

Lebanese banks announced their commitment to the US sanctions, bearing in mind the political composition of Lebanon. According to the sanctions, Lebanese banks may not open accounts or deal with Hizbullah members.

The punitive measures have not shaken Hizbullah, however, even if they have affected the outlook for investment in Lebanon. The country’s credit ratings have nosedived every time a new list of sanctions has been announced, but things go back to normal once the situation is resolved.

Some observers believe the sanctions were announced to prevent Al-Hariri from forming a government, pushing Hizbullah into composing a government formed entirely of its allies. This would lead to more opportunities for the US to impose more sanctions on Lebanon.

The US knows that any direct targeting of Hizbullah inside Lebanon would likely result in an economic crisis that would harm the country.

Riad Salama, governor of the Central Bank of Lebanon, said as much during a visit to Washington in February, and the recent moves by Washington may be evidence that the US does not want to harm Lebanon’s economy.

*A version of this article appears in print in the 24 May 2018 edition of Al-Ahram Weekly with headline: The aftermath of sanctions