Authoritarian regimes such as Saudi Arabia and Russia have had to slash government spending because of the drop in oil prices, notes Erik Voeten, Associate Professor of Geopolitics and Justice in World Affairs at Georgetown University. This makes military adventures more difficult. Perhaps when oil prices are high, oil-rich states are also less afraid that others will punish them for transgressions. Moreover, Michael Ross and others have shown that high oil wealth may stifle democracy, produce unequal gender outcomes and result in more civil wars, he writes for The Washington Post’s Monkey Cage blog:
That said, volatility in oil prices could also produce domestic unrest that could turn violent. Lower oil prices and slashed government spending make leaders less popular. Some scholars worry that leaders could start wars to distract people from domestic troubles (known as diversionary wars). Some anecdotes seemingly support such a theory, but the overall record is less clear. Scholars have argued that diversionary dispute initiation is usually not terribly effective. There is no evidence that oil busts bring down authoritarian regimes. Moreover, low oil prices reduce food prices, which may reduce domestic unrest in non-oil producing countries. Thus, the global effect of a decline in oil prices on international violence may well be positive, although we still need more research on this.