Azerbaijan is located in the Caucasus region, a transcontinental zone between Europe and Asia. It is surrounded by three major regional powers — Russia, Turkey and Iran — which largely shape its foreign policy and orientation. The other two countries in the Caucasus, Georgia and Armenia, also influence Azerbaijani decision making in the security sphere. In particular, Armenia's strong relationship with Russia — 5,000 Russian troops are stationed in Armenia — has shaped Azerbaijan's security strategy . Armenia and Azerbaijan fought a war over the disputed Nagorno-Karabakh territory from 1988 to 1994, during which Armenia seized the territory and several contiguous regions that were formerly part of the Soviet republic of Azerbaijan. Azerbaijan's defeat, combined with Russia's subsequent de facto backing of Armenia, forced it to build up its military spending on the back of its growing energy production and exports .