A large body of literature claims that oil production increases the risk of civil war. However, a growing number of skeptics argue that the oil–conflict link is not causal, but merely an artifact of flawed research designs. This article re-evaluates whether – and where – oil causes conflict by employing a novel identification strategy based on the geological determinants of hydrocarbon reserves. We employ geospatial data on the location of sedimentary basins as a new spatially disaggregated instrument for petroleum production. Combined with newly collected data on oil field locations, this approach allows investigating the causal effect of oil on conflict at the national and subnational levels. Contrary to the recent criticism, we find that previous work has underestimated the magnitude of the conflict-inducing effect of oil production. Our results indicate that oil has a large and robust effect on the likelihood of secessionist conflict, especially if it is produced in populated areas. In contrast, oil production does not appear to be linked to center-seeking civil wars. Moreover, we find considerable evidence in favor of an ethno-regional explanation of this link. Oil production significantly increases the risk of armed secessionism if it occurs in the settlement areas of ethnic minorities.
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