HONOURABLE MENTION Hedging for Oil: Foreign Energy Investments and Military Intervention Strategies in Civil Wars

Abstract

Conventional wisdom and popular myths suggest states will go to great lengths to secure oil and gas resources. Recent academic work supports this idea, particularly in explaining why states reliant on energy imports become involved in the civil wars of their suppliers. However, this research has mainly focused on the incentives among importers, overlooking the role of foreign energy investments. Do states with oil and gas investments in conflict-ridden countries also go to great lengths to protect these assets? This paper explores how energy investments alter the motivations for foreign military intervention strategies in civil wars. Rather than going “all in,” invested states will opt for more limited military support strategies due to the long-term implications created by investments. This approach, known as ‘hedging,’ allows states to show commitment to the supported side while signalling restraint to the opposition, effectively managing long-term reputations with all parties to safeguard investments. I test this theory in a quantitative analysis of 94 civil wars between 1975 and 2017. I find when civil war countries host foreign oil and gas resources, invested supporters opt for limited support strategies rather than intensive interventions, such as deploying troops. These findings have implications for civil war dynamics, such as impacting conflict duration, intensity, and outcomes.