The Problem With Being a Petrostate

Is the “oil weapon” largely nonexistent?

Ashford-Emma-foreign-policy-columnist
Ashford-Emma-foreign-policy-columnist
Emma Ashford
By , a senior fellow with the Reimagining U.S. Grand Strategy program at the Stimson Center.
A fuel barrel lies on its side.
A fuel barrel lies on its side.
A used fuel barrel sits in the the Yazoo River floodwaters near Yazoo City, Mississippi, on May 22, 2011. Mario Tama/Getty Images

Since the end of World War II, the number of armed conflicts between states has plummeted. One group of countries, however, stands out in its continued aggression: oil-rich states, which have been at the heart of some of the most notorious and bloody conflicts in recent decades, from the Iran-Iraq War to the Soviet invasion of Afghanistan, from the Syrian civil war to the Russian invasion of Ukraine. No matter how you define a petrostate—whether you look at a state’s oil-derived wealth, its dependence on oil revenues, or its exports and relative importance to world markets—there is strong evidence that petrostates are more likely than other countries to start wars.

The question of why is trickier. The simplest explanation is wealth. Oil-wealthy states—which enjoy substantial income from their production of oil and natural gas—are in a lucrative business, one typically dominated by states themselves, which earn billions of dollars from the oil trade. From weapons to foreign aid to violent proxies, leaders of oil-wealthy states simply do not need to make the same budgetary trade-offs as non-resource-wealthy states.

Superproducer states, those countries that produce a significant fraction of world oil supplies, often receive intangible benefits from their exports, whether that’s a privileged negotiating position, a seat at the table in big international organizations, or—in a few extreme cases like Saudi Arabia—hegemonic protection for their resources and regime. Their production helps determine global prices and is a potential source of leverage and prestige.

Since the end of World War II, the number of armed conflicts between states has plummeted. One group of countries, however, stands out in its continued aggression: oil-rich states, which have been at the heart of some of the most notorious and bloody conflicts in recent decades, from the Iran-Iraq War to the Soviet invasion of Afghanistan, from the Syrian civil war to the Russian invasion of Ukraine. No matter how you define a petrostate—whether you look at a state’s oil-derived wealth, its dependence on oil revenues, or its exports and relative importance to world markets—there is strong evidence that petrostates are more likely than other countries to start wars.

The question of why is trickier. The simplest explanation is wealth. Oil-wealthy states—which enjoy substantial income from their production of oil and natural gas—are in a lucrative business, one typically dominated by states themselves, which earn billions of dollars from the oil trade. From weapons to foreign aid to violent proxies, leaders of oil-wealthy states simply do not need to make the same budgetary trade-offs as non-resource-wealthy states.

Book cover
Book cover

This article is adapted from Oil, the State, and War: The Foreign Policies of Petrostates by Emma Ashford (Georgetown University Press, 365 pp., $34.95, June 2022).

Superproducer states, those countries that produce a significant fraction of world oil supplies, often receive intangible benefits from their exports, whether that’s a privileged negotiating position, a seat at the table in big international organizations, or—in a few extreme cases like Saudi Arabia—hegemonic protection for their resources and regime. Their production helps determine global prices and is a potential source of leverage and prestige.

Meanwhile, the foreign policy of oil-dependent states—whose economies are entirely dependent on oil production—is often driven by personalities, rather than by a professionalized policymaking process. These states aren’t discussed further in this excerpt—though they’re addressed in my book at length—but oil production can undermine their foreign policy, and their leaders can often wage war with fewer constraints.

At a time of critical change for global oil and gas markets, it is important to understand the ways that oil can shape—and limit—these types of petrostates’ foreign policy. While oil production affects them in different ways, it turns out there is one commonality: Oil wealth may help petrostates start wars, but it doesn’t help them win them. The oil weapon may seem powerful but is in reality often toothless; for petrostates, more money sometimes means more problems.


Cicero, perhaps apocryphally, is said to have written that “endless money forms the sinews of war.” War and wealth are intrinsically linked. A nation’s ability to wage war is inherently dependent on its ability to raise and fund armed forces.

Oil-wealthy states—defined here as those that earn more than $1,000 per capita in oil and natural gas revenues each year—hold vast, easily obtained wealth that makes them almost uniquely capable of waging war without sacrificing domestic priorities. Due to high levels of income from oil and gas production, they can afford to build up military capacity, buy weapons, increase military salaries, or engage in research and development, all without substantial budgetary trade-offs. To put it another way: If they wish, leaders in oil-wealthy states can have guns and butter.

Oil-wealthy states are a diverse bunch, including Russia, small and large Middle Eastern states (Qatar, Iran), several wealthy democracies (Norway, Australia), and various underdeveloped African and Central Asian nations (Libya, Equatorial Guinea, Turkmenistan). Yet although they face a diverse set of national security challenges, most share common trends in their military expenditures: As oil prices rise, so does military spending. When oil prices crash, military spending eventually drops. Cross-national statistical analysis confirms that oil-wealthy states spend more on their militaries on an absolute basis, regardless of regime type or major-power status.

Likewise, data on arms sales shows a strong correlation between oil wealth and weapons purchases. According to a metric from the Stockholm International Peace Research Institute, although wealthy oil states are a relatively small proportion of all states globally, they have been well represented among top arms importers, both during the Cold War and after. Global arms sales have largely risen in line with oil prices in recent decades.

Of course, there are other ways to transform money into military capacity, notably in the research and development of advanced technologies. The most controversial investment in technological research is the development of a nuclear weapons program. Data on nuclear programs and nuclear latency reveals that oil wealth is strongly correlated with nuclear development, with oil-wealthy states on average more likely to have an active nuclear program or to have the latent nuclear capacity necessary to build one quickly.

Oil-wealthy states not only are more likely to start wars but may be more likely to lose them.

Interestingly, oil wealth is not correlated with higher spending as a percentage of government expenditure. In plain English, this means that oil-rich and oil-poor states appear to spend comparable chunks of their overall budgets on their militaries. If the state budget is a pie, then oil-wealthy states simply have a much larger pie, with the government spending more overall.

And while oil-wealthy states may spend more on their militaries, that doesn’t necessarily mean they have more combat capability to show for it. Arms must be chosen wisely to meet key threats, and troops must be trained on new weapon systems to use them effectively. Spending a lot on prestige weapon systems—fighter jets or the latest in high-tech gadgets—may look impressive but yield little military advantage.

Politically difficult changes in strategy, doctrine, or force structure may be necessary to improve military effectiveness, even with higher levels of spending. This is particularly the case in countries with high levels of corruption and underdeveloped institutions—maladies common in oil-wealthy states. Indeed, we’ve seen many of these flaws on public display in recent months in Russia’s invasion of Ukraine. Despite billions poured into Russia’s military modernization over the last decade, the military has performed abysmally.

Even well-implemented military spending doesn’t always yield battlefield effectiveness. For authoritarian regimes, battlefield effectiveness may be impeded by other regime priorities such as coup-proofing. Consider Saddam Hussein’s Iraq, where efforts at coup-proofing against his army resulted in poor performance and near disaster during the early years of the Iran-Iraq War in the 1980s. Any army that prioritizes domestic policing and repression is not necessarily an effective fighting force against peer competitors.

As in any state, therefore, military expenditure must be coupled with effective management and strategic doctrine to produce a capable force. What military expenditure does offer, mainly, is potential—the potential to substantially improve military capability if it is spent wisely.

The more difficult question is whether increased military expenditure itself makes a state more likely to initiate conflicts. One could argue that oil wealth doesn’t cause war but merely facilitates it.

Yet excessive military spending could easily increase the risk of conflict. The connection is simple: Having a well-equipped and well-funded military gives leaders more confidence in their ability to win. These leaders can assume, perhaps wrongly, that they have assembled a superior fighting force. Baathist Iraq—a particularly belligerent petrostate—provides an illustration of this: Saddam’s conviction in his own military genius, his faith in new armaments, and his belief that his troops performed well (despite all evidence) often led him to conflicts he could not win. Libya’s Muammar al-Qaddafi made similar mistakes.

This offers one potential explanation for oil-wealthy states’ tendency toward conflict: Their overconfident leaders mistake high military spending for actual capability. It also suggests an unfortunate corollary: Oil-wealthy states not only are more likely to start wars but may be more likely to lose them. Oil wealth may even cushion the negative impact of losing a war, providing ways to buy off segments of society and allowing a leader to maintain power despite repeated conflict losses.


Analysts often argue that petrostates—particularly those that are most important to global energy markets—may be able to leverage their resources into other major foreign-policy benefits. But the question of which states are truly essential for the functioning of global energy markets and which are less important is less commonly addressed.

There is only one truly global energy marketplace: Unlike all other resources, oil is priced in dollars and traded on a global basis. Though there are in practice deviations from this system, in general, the importance of superproducer states to global energy prices is almost directly proportional to their level of production.

As with oil-wealthy states, these superproducer states are diverse, connected only by their shared achievement of producing at least 2 percent of world oil supply in a year. They include stereotypical oil exporters (Saudi Arabia, Venezuela), major powers (Britain, China, the United States, Russia), and populous developing states (Nigeria, Indonesia). And they vary in terms of their importance as global exporters. Indeed, states like China are major oil producers, yet we commonly conceive of them as energy insecure. Some superproducer states consume most of what they produce; others export five or 10 times what they consume domestically. That domestically consumed production is still important, since Chinese production, for instance, still impacts the global price of oil. Yet the most important superproducer states from the viewpoint of economic statecraft are those that export more than they consume.

Perhaps the most direct way in which these states can leverage this advantage is the use of the so-called oil weapon. At its simplest, this is the idea that a major oil- or gas-exporting state could use supply shut-offs to compel policy changes in an importing state. It thus bears a strong resemblance to the use of economic sanctions. As research on sanctions teaches us, it may not even be necessary to use the oil weapon: Threats alone may be effective at deterring, coercing, or compelling importing states. But sometimes a threat will be insufficient, in which case targeted supply shutdowns could be used to inflict economic pain and induce policy change. The oil weapon is different from other uses of economic statecraft in only one way: the relative uniqueness of oil. Super-exporting states have a potentially powerful economic lever available to them that other states do not.

That relative uniqueness goes some way to explaining why the oil weapon might be a powerful tool. Despite efforts to transition to renewables and other green energy sources, hydrocarbons are still the engine of global economic prosperity. For most countries, a complete shut-off of gas or oil would be at best disruptive and at worst catastrophic, suggesting that the oil weapon could indeed be a useful tool of leverage.

But there are also reasons to doubt this argument. Though a shortfall in supply could be problematic, the oil market is global. Individual exporters rarely have the power to cut a state off from the market entirely, and states can relatively easily replace lost imports with other sources. Pipelines produce more of a captive market but are not ubiquitous. Refineries, which are set up for specific types of crude oil, can make some producers more attractive than others to importers, but they can be retooled for new types of crude if necessary. Meanwhile, exporters are often dependent in turn on the revenues generated by oil exports, making shut-offs costly.

A big part of the problem is the fuzzy and ill-defined nature of “oil weapon,” a term used anecdotally to describe any number of different phenomena. Using oil or natural gas instrumentally to seek political goals is indisputably a form of economic statecraft. But even the narrowest definition covers everything from direct embargoes of resource shipments to production cuts and price manipulation. The opposite has also sometimes been described as an oil weapon: the use of sanctions or embargoes against resource-rich states, preventing them from selling their resources for profit. The more polemical the author, the more likely they are to describe the oil weapon broadly: For some hawkish commentators in the United States, for example, practically everything that Iran or Russia does weaponizes oil, from terrorism funding to pipeline negotiations.

The oil weapon seems to be prone to diminishing returns.

A more precise definition would begin with oil itself as a weapon, which suggests that we should focus on the negative uses of oil (i.e., cutoffs) rather than the use of oil to gain favors. And while it is more common to hear the term “oil weapon,” it is often a natural gas weapon. Indeed, because it is more likely to travel through static pipelines than oil, natural gas is in some ways a more potent weapon. The oil weapon should thus be thought of as the use of oil or gas as a bargaining tool by an exporter, including price manipulation or embargo. By this standard, there have been around 20 cases of usage of the oil weapon since World War II, the best known being the 1973 Arab oil embargo and the 2006 Russia-Ukraine gas dispute.

Yet by any reasonable standard, these two cases do not represent coercive success for the petrostates involved. The Arab oil embargo, for all the political outrage it provoked, didn’t produce substantive policy changes in the West. Indeed, Western nations continued to support Israel contrary to the demands of the OPEC member states, while the embargo’s economic impacts served primarily to make Western publics more aware of their dependence on Middle Eastern oil. Russia’s 2006 embargo of gas to Ukraine—motivated by a complex mixture of price dispute and geopolitical disagreement—was successful in achieving a renegotiated gas price, but not in achieving any substantive political shift. As in the 1973 embargo, this incident served to make European states aware of the potential for future coercion, leading to attempts to diversify supply and better integrate the European gas market to reduce Russia’s leverage.

In general, these best-shot cases highlight the reality of the oil weapon: Exporters rarely use it, more rarely succeed in achieving political concessions, and are likely to provoke a counterproductive backlash when they do so.

This reality is further bolstered by the almost total lack of other successful cases, leaving us with a clear question: Why is oil coercion so feared but so ineffectual? For answers, we can look to the literature on sanctions.

First, unless they are multilateral in nature, sanctions are rarely successful. Sanctions busting is common and allows sanctioned states to trade for or obtain scarce goods elsewhere. The most successful sanctions are thus either those imposed by a majority of major powers—such as the multilateral sanctions on Iran that led to the negotiation of the 2015 nuclear deal—or those imposed by the United States, whose role as the world’s financial clearinghouse places it in a unique position to impose sanctions restrictions extraterritorially. No such actor exists for the oil weapon, though OPEC may have come close at one time.

The problem of sanctions busting is even more pronounced for the oil weapon thanks to the globalized nature of the oil market. States can look elsewhere to source oil, as China did in the 1950s when it was targeted by the Soviet Union over political differences. The wide availability of alternate supplies allowed China to maintain its economy while dialing up domestic production. It is certainly true that pipeline-dependent gas is more conducive to this kind of coercion than oil. But as our gas case illustrates, there are few places as vulnerable as Ukraine, where the geography of the post-Soviet space creates some unique vulnerabilities for Russia’s neighbors.

Second, economic pain does not necessarily translate into policy change. Certainly, there are cases of minor policy concessions, such as Belarus’s acquiescence to higher Russian gas prices. But the majority of cases show minimal evidence of economic pain and no real evidence of any substantial political concessions made as a result of the oil weapon’s use.

Finally, as with sanctions, the oil weapon seems to be prone to diminishing returns and is most successful when applied quickly and forcefully. The 1973 oil embargo produced only one long-lasting political impact: a desire among policymakers to mitigate future oil shortages through a variety of programs including the Strategic Petroleum Reserve. The 2006 embargo likewise saw European countries seek to liberalize and reform energy markets to reduce dependence on Russia. The reforms that often follow the use of the oil weapon have in many ways diminished its utility going forward; even Russia, with its unusually concentrated control of European gas pipelines, has found it more difficult to use its energy weapon in recent years.

It is thus surprisingly, perhaps even counterintuitively, hard for a petrostate to directly exercise its oil power even when it exports a sizable chunk of the world market. It is undoubtedly easier to leverage gas power, but the tendency of states to consider this a priori when building pipelines means its impact was mostly seen in the post-Soviet space and has been diminishing over time. Outside that space, the oil weapon is largely nonexistent.

Emma Ashford is a senior fellow with the Reimagining U.S. Grand Strategy program at the Stimson Center, an adjunct assistant professor at Georgetown University, and the author of Oil, the State, and War.

  Twitter: @EmmaMAshford

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