Abstract: This dissertation is fundamentally about the formation of new regional spaces in Central Eurasia viewed from a dynamic, comparative and historical approach. Analyzing the global-local economic and political interactions and their consequences on resource rich countries of the Caspian Sea enable us to reframe security as a central element of the new global order. In this respect, the dissertation examines how two particular states, Azerbaijan and Iran, respond to the changing global security environment and optimize their capacity to absorb or control change. Here, security as I conceive is multidimensional and engages various social, political and economic domains. My research is articulated along three hypotheses regarding the formation of a new regional space and its consequences on territorial polarization and interstate rivalry. These hypotheses, respectively and cumulatively, elucidate global and domestic contexts of regional space formation, regional strategic and discursive trajectories, and regional tensions of global/local interactions. In order to empirically test these hypotheses, a series of thirty interviews were conducted by the author with local and foreign business representatives, civilian and government representatives, and corroborated by economic data collected from the International Energy Agency. The findings of the research validate the primary assumption of the dissertation that Azerbaijan and Iran have chosen the regional scale to address discrepancies between their aspired place in the new world order and the reality of their power and international status. Extending the argument for structural scarcity of oil towards contenders, this dissertation concludes that the Caspian oil has become a fundamental element of the regional discourse. The mismatch between the rhetoric of sovereign rights and energy security on one side and the reality of regional countries' powerlessness and their need to reach international markets on the other side are fundamental focal points of divergent regional trajectories of Azerbaijan and Iran. Divergent readings of energy security and its provision by Azerbaijan and Iran on the one hand, and how energy security is interpreted and incorporated in institutionalized regulation and new regimes of governance by consumer countries on the other hand, shape the new configuration of the Caspian Sea regionalism.