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While most econometric-based studies have found a positive association between oil wealth and internal armed conflicts, the literature is less conclusive about the processes that may link the two variables. Much uncertainty still exists about the causal pathways linking oil and armed conflicts. The main argument of this paper is that subnational governments in Colombia became a sub-state prize for armed groups after the former commenced to manage abundant oil royalties in a context of political decentralisation. The pursuit of these oil revenues shaped the strategies implemented by the armed groups, which included the use of armed force against civilians and the employment of non-coercive means that also targeted the population. The new pathway, which I term the sub-state-as-target mechanism, is driven by the strategies implemented by armed groups with the objective of seizing oil revenues through the political capture of the local democracies. The paper offers evidence on how the processes of sub-state capture, its preservation (and contestation), and the extraction of the oil royalties had an incidence on the onset, intensity and conflict at the subnational level in Colombia. A comparative case study approach was implemented to examine how oil revenues affected conflict at the subnational level in Colombia. The paper draws on data collected over five months of fieldwork in oil-royalty-abundant municipalities, quantitative data, and process-tracing analysis covering the period from the early 1960s to 2017.