The endless low-level wars fought in Oceania against either of the other two superpowers create confusion by directing Party members towards hatred of an external enemy and away from the reality that their problems are caused by the Party itself. Paranoia and aggressive impulses that naturally build up inside the oppressed outer Party members because of the way they are treated are directed towards an external enemy that is demonized.
Winston experiences some of this in the novel as he attends a speech against the enemy, given by an inner Party official during Hate Week:
His voice, made metallic by the amplifiers, boomed forth an endless catalogue of atrocities, massacres, deportations, lootings, rapings, torture of prisoners, bombing of civilians, lying propaganda, unjust aggressions, broken treaties. It was almost impossible to listen to him without being first convinced and then maddened.
As Winston finds out later when he reads Goldstein's book on oligarchic collectivism, the citizens of other countries are no different from his own. The hate and paranoia are manufactured as a way to control the masses. The wars, which are pointless, are meant to use up extra resources that could otherwise make life better for the average person. But the wars are also used to create what the Party thinks is the proper mindset of hate and fear in which Party members should live:
War, it will be seen, accomplishes the necessary destruction, but accomplishes it in a psychologically acceptable way. ... Even the humblest Party member is expected to be competent, industrious, and even intelligent within narrow limits, but it is also necessary that he should be a credulous and ignorant fanatic whose prevailing moods are fear, hatred, adulation, and orgiastic triumph. In other words it is necessary that he should have the mentality appropriate to a state of war.
War keeps the Party members' emotions in a primitive and continuously angry and fearful state, punctuated by moments of triumph when, for instance, a battle is won. The state desires continuous warfare so that it can replace ordinary emotions of love, loyalty, compassion, and friendship with hate, fear, adoration of the great leader, and an animalistic sense of victory. These are unhealthy emotions to have in more than very small doses, but the Party wants its members dehumanized with a steady diet of them.