One year ago, the United States government froze all property of the Central Bank of Iran and other Iranian financial institutions within the United States. The move was part of a broader effort to compel the Islamic Republic to give up its alleged nuclear weapons program. How is it working out?

The evidence suggests that Iran’s economy is suffering considerably. But as with the sanctions against Iraq during the 1990s, there is less evidence that the economic pain is actually changing political behavior. Iran’s leadership remains defiant of international pressure. And just like the sanctions against Iraq, much of the economic hardship in Iran is borne by the poorest and most vulnerable members of society.

The deeper question might be: How is it that the United States is in conflict with yet another major oil-producing state? Two out of the three members of George Bush’s “axis of evil,” Iraq and Iran, were oil-producing states. In the 1980s and 1990s, Libya was an American adversary and a keen supporter of a whole host of terrorist groups. Other oil-exporters, from Sudan to Venezuela, have also been a thorn in America’s side and destabilized international security. Is there something about oil wealth that makes states more prone to conflict?

In my new book, Petro-Aggression: When Oil Causes War, I explore the relationship between oil-exporting “petrostates” – defined by having oil exports of at least 10 percent of GDP – and aggressive foreign policy. I argue that the effect of this oil income depends heavily on the domestic politics of the petrostate. In certain circumstances – namely, when a government is post-revolutionary or otherwise aggressive – oil makes interstate conflict more likely.

Oil income generates some incentives that increase the probability of aggression, and other incentives that decrease it. The net effect depends crucially on the preferences of the petrostate’s leadership.

For the complete article, please see New Security Beat.