During the cold war Iran could not establish good relations with its neighbouring countries as some of them were part of the Soviet Union, but a key transformation took place with the demise of Soviet Union that allowed Iran to start taking advantage of its location. Iran's strategic geographical location allows it to be the part of Middle Eastern, Persian Gulf, Central Asia, and to some extent South Asia. Therefore, it has adopted a regionalist approach and does not want to make its relations stringent with its neigbhouring countries due to its ideological differences with US and Europe.
Iran's regional foreign, security, and energy situation remains multifaceted and cannot be viewed from one dimension. It encompasses bottomless unique ancient viewpoint and touches on a geographical scope that stretches from Pakistan to Turkey and from the Caspian Sea to the Persian Gulf. Iran is the home of several economic opportunities for its neighbors. Its strategic interests in this region are developing encouraging political relations with the states of the region, to expanded trade and investment particularly with Pakistan, Russia, Turkey, Iraq, Persian Gulf States, Caucasia, and Central Asia. There are important factors that provide a sense of active regionalism policy from Iran. Firstly, the development of energy-based industries that balance rather than compete with local industry; secondly to build relationship that helps its escape from international isolation, which it sees as shielded by US global hegemony. Iran also inclines towards Russia for maintaining close and professional, if not necessarily cordial, relations.
Iranian methodology to its neighbors is unusually free of religious influence. The best instance is the role of Iran during civil war in Tajikistan (1992-1997). Iran carried out arbitration between the Tajik government and Tajik Islamic Renaissance Party. All of Central Asian countries never mentioned any backing of Iran to Islamic groups in this region. Iran's main concern to Central Asia is to protect its territorial integrity. Iran is controlling the major petroleum transportation lines, which they used smartly to pressurize major powers whenever they want.
Iran is also trying to establish a web of oil-and-gas production and consumption in Persian Gulf that is vital for all of the regional states. Initiatives like Iran-Iraq pipelines for both oil and products between Basra refinery in Iraq and Abadan refinery in Iran is one of them. Iran tries to do best use of topographical advantages of region's country for transportation and transit like trading of oil from Caspian to the Persian Gulf, sending Iraqi oil to Afghanistan, and Iran-Pakistan-India gas pipeline. Due to Indian rebuff to IPI project, the scope of Iran-Pakistan gas pipeline confined to Pakistan. Indian strategists still contain the narrow minded ideology of cold war, claimed that by launching the gas Iran-Pakistan-India gas pipeline project, India would become Pakistan's "jailbird."
In future, Iran's internal dynamics will determine the triumph or failure of its policy to its neighbors. Despite of all potential for collaboration, it has to be noted that Iran can only play an active role and in no way is a dominant player in the region. Iran's own internal economic and sometimes political problems, which are made worse with the help of US to isolate Iran, limit Iranian role in the region.