Becko, John SturmFeroce, Tommy J.2026-07-072026-07-072026-04-09https://theses-dissertations.princeton.edu/handle/88435/dsp019880vv471Energy has long been theorized as an instrument of geopolitical alignment. Yet, its causal effects on bilateral security partnerships remain poorly understood. Our research uses the mid-2000s U.S. Shale Revolution as an exogenous supply shock to causally identify the effects of rising energy-interdependence on two measures of strategic alignment: interstate arms transfers and credit default swap (CDS) spreads on sovereign debt. Using a shift-share Bartik instrument across a panel of forty countries from 2000 to 2024, our findings suggest that increasing energy-interdependence causally reduces bilateral arms transfers from the U.S. to its clients. Moreover, this effect deepens over time with a standard deviation rise in interdependence causally reducing arms transfers by up to 88% in the lagged period. This effect is termed the Energy-Arms Substitute. To test this mechanism’s underlying assumptions, complementary regression sets using a monthly panel of sovereign debt CDS spreads reveal that greater energy-interdependence causally reduces sovereign risk perceptions in advanced markets by 23% and 30% across 5Y and 10Y CDS durations. Together, our findings suggest that U.S. energy exports function as a de facto security architecture for client states. These results directly impact outlooks for U.S. energy policies, alliance health metrics, and the renewable energy transition.en-USPrinceton University Senior Theses