The Exaggerated Threat of Oil Wars

Editor’s Note: That states go to war to seize natural resources, especially oil, seems like a truism. However, Emily Meierding of the Naval Postgraduate School argues that such wars for oil are in reality exceptionally rare. In this post, based on her new book, she explains that the costs and risks of such conflicts are almost always too high for would-be aggressors to pay.

Daniel Byman

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Over the past year, Chinese seismic survey vessels and their paramilitary escorts have interfered repeatedly with Vietnamese and Malaysian oil and natural gas exploration in the South China Sea, harassing drilling rigs and support ships. These confrontations have prompted concerns that they could provoke a larger military conflict, especially as China exploits the unsteadiness created by the coronavirus to become more aggressive in its various international territorial disputes.

Happily, the historical record indicates that China and its neighbors are unlikely to escalate their energy sparring. Contrary to overheated rhetoric, countries do not actually “take the oil,” to use President Trump’s controversial and inaccurate phrase. Instead, my recent research demonstrates that countries avoid fighting for oil resources.

No Blood for Oil

Between 1912 and 2010, countries fought 180 times over territories that contained—or were believed to contain—oil or natural gas resources. These conflicts ranged from brief, nonfatal border violations, like Turkish jets entering Greek airspace, to the two world wars. Many of these clashes—including World War II, Iraq’s invasion of Kuwait (1990), the U.S. invasion of Iraq (2003), the Iran-Iraq War (1980-1988), the Falklands War (1982), and the Chaco War between Bolivia and Paraguay (1932-1935)—have been described as classic oil wars: that is, severe international conflicts in which countries fight to obtain petroleum resources.

However, a closer look at these conflicts reveals that none merits the classic “oil war” label. Although countries did fight over oil-endowed territories, they usually fought for other reasons, including aspirations to regional hegemony, domestic politics, national pride, or contested territories’ other strategic, economic, or symbolic assets. Oil was an uncommon trigger for international confrontations and never caused major conflicts.

On approximately 20 occasions, over almost a century, countries engaged in minor conflicts to obtain oil resources. However, these “oil spats” were brief, mild, mostly nonfatal, and generally involved countries whose hostility predated their resource competition. Greece and Turkey have prosecuted oil spats. So have China and Vietnam, Guyana and Venezuela, and a dozen other pairs of countries. These confrontations inspired aggressive rhetoric while they were underway, but none of them ever escalated into a larger armed conflict.

Oil has periodically influenced the trajectories of major conflicts that were launched for other reasons. At the end of World War I, British troops seized Mosul province in order to secure its oil resources. Oil aspirations also motivated Germany’s invasion of the Russian Caucasus (1941-1942) and Japan’s invasion of the Dutch East Indies (1941-1942). While the latter attack precipitated U.S. involvement in World War II, it was also a continuation of the Second Sino-Japanese War (1937-1945). All of these “oil campaigns” were inspired by aggressors’ wartime resource needs. Absent the ongoing conflicts, these countries would not have fought for oil.

The historical record also reveals one “oil gambit”: Iraq’s invasion of Kuwait in 1990. Conventional explanations for the attack assert that Saddam Hussein was either greedily attempting to grab his neighbor’s oil resources or needily attempting to limit Kuwait’s oil output in order to raise oil prices and escape from a deepening economic crisis caused by falling oil prices and Iraq’s large debts, incurred during the Iran-Iraq War. The first explanation is wrong. The second is correct, but incomplete, because it omits Saddam’s larger motive for aggression: his fear of the United States. The regime’s records, seized during the 2003 U.S. invasion, reveal Saddam’s belief, nurtured since the 1970s, that the United States was determined to contain Iraq and remove him from power. In 1990, this false conviction led Saddam to assume that the United States was engineering Iraq’s economic crisis by encouraging Kuwait and the United Arab Emirates to exceed their OPEC oil production quotas and refuse Iraq’s repeated entreaties to cancel its war debts. After his infamous meeting with U.S. Ambassador April Glaspie failed to persuade Saddam of the United States’s benign intentions, he concluded that conquering Kuwait was his only remaining means of survival. Fear of U.S. hostility, not oil aspirations, prompted Iraq to invade Kuwait.

A Question of Value

The absence of oil wars is surprising and counterintuitive. Petroleum is an exceptionally valuable resource. It fuels all countries’ economies and militaries. Oil sales are also a crucial revenue source for producer states. Surely, countries are willing to fight to obtain petroleum resources.

In fact, classic oil wars are extraordinarily costly. A country that aims to seize foreign oil faces, first, the costs of invading another country. International aggression is destructive and expensive under the best of circumstances. It may also damage the oil infrastructure that a conqueror hopes to acquire. Next, if a conqueror plans to exploit oil resources over the long term, it faces the costs of occupying seized territory. As the United States has learned from its “endless wars,” foreign occupation is extremely challenging, even for the world’s most powerful country.

Additionally, a conqueror faces international approbation for oil grabs. As censorious responses to Trump’s proposition that the United States “take the oil” from Syria, Iraq and Libya have indicated, seizing another country’s oil is considered reprobate behavior. It violates international laws against plunder and materially threatens to consolidate control over global oil resources. As Iraq learned in 1990, other countries and international institutions respond to oil grabs with diplomatic censure, economic sanctions and even military force. Finally, if a conqueror manages to maintain control over foreign oil resources, it may not be able to exploit them. Conquest scares off the foreign oil companies that many countries rely on to finance and manage oil production.

Because of the high costs of invasion, occupation, and international opprobrium, classic oil wars are simply not worth the effort, regardless of petroleum’s value. Countries may occasionally decide that it is worth initiating an oil spat to obtain desired resources, especially when targeted territories are contested and other issues are at stake. However, fighting major conflicts for oil does not pay.

Keep Your Eyes Off the Prize

All of this is good news for stability in the South China Sea and other oil-rich regions. There is no reason to expect that China’s recent energy sparring with Vietnam and Malaysia will escalate into a larger international conflict, at least with regard to the oil at stake. Oil spats never do, no matter how acrimonious they appear while underway.

That being said, China and its neighbors could still fight for other reasons. The South China Sea’s abundant but impacted fisheries are a critical food and livelihood source for the littoral states’ populations. Critical sea lines of communication pass through the region. And China has attempted to extend its hegemonic influence in the South China Sea by refusing to abandon its legally untenable “nine-dash line” maritime claim and by constructing artificial islands on numerous maritime features. Any of these factors could spark a larger international conflict.

This also means that the low oil prices that are expected to accompany peak oil demand will not produce a peace dividend. Countries won’t engage in fewer conflicts as oil’s value declines, because they weren’t fighting over oil in the first place.

It’s tempting to use oil to explain armed conflict. Oil is valuable and tangible, so it seems to be an obvious target for international aggression. In contrast, factors like hegemonic aspirations and national pride are amorphous and their value hard to quantify. Yet, historically, these other factors have caused significant numbers of severe international conflicts, while petroleum has not. To effectively discourage conflict escalation in the South China Sea and elsewhere, policymakers need to focus on these factors, and resist being distracted by oil.