Using water to enforce a political agenda is a global concern for peacebuilding. Hence, understanding hydro-politics is essential when predicting possible water-based conflict scenarios between riparian countries. A structured theory covering most of the possible events involved in hydro-politics would help assess with a sufficient understanding the reasons and consequences of water conflict. This study proposed a comprehensive theory of hydro-politics, particularly those related to water impoundment and water control through upstream country dams, to identify the root causes of water conflicts between riparian states and the factors of global challenges that arise in conflicts. The framework used eight phases elaborated on the key theories of international relations and demonstrated the possible connection between water conflict/cooperation events and the adopted international relations doctrine at the state level. Each phase illustrates the hydro-political relations between the riparian countries, expected level of conflict, power balance, and possible consequences. Additionally, 21 international case studies were used to illustrate these phases. The theory may assist decision makers in analyzing collective risk and alleviating any expected negative implications of water conflicts.