Azerbaijan is in the Caucasus — a mountainous and geopolitically strategic region that serves as a land bridge between Europe, the Middle East and Asia. Azerbaijan is, in many ways, defined less by its territory than by its neighbors — Russia to the north, Iran to the south and Turkey to the west — all of which have controlled part or all of modern Azerbaijan throughout most of its history. All three powers retain substantial influence in Azerbaijan to this day, and the diverse geography of the Caucasus helps complicate the regional dynamics. To the east is the Caspian Sea, a landlocked body of water where Azerbaijan's energy resources are concentrated. To the west is Armenia, Azerbaijan's historic rival. Armenia and Azerbaijan dispute the Nagorno-Karabakh territory, even fighting a war over it from 1988 to 1994. Azerbaijan's economic, political, and demographic resources are concentrated in the Baku area. Azerbaijan also holds the exclave of Nakhchivan, which borders Armenia, Turkey and Iran. Azerbaijan has been able to use its energy resources and its location (as part of the Southern Corridor around Russia) to build leverage and balance regional powers — maintaining sovereignty in ways that are not available to other Caucasus countries like Georgia and Armenia. However, Azerbaijan will always face the difficulties inherent in being surrounded by larger powers and must maneuver carefully in order to preserve its sovereignty.
