However, hostilities continued. While Azerbaijan offered wide-ranging autonomy, the Armenians demanded full independence. Politics in the region are dominated by the struggle for control of the oil routes vital to the exploitation of energy reserves in the former Soviet republics. Western transnational companies are competing for the lion's share of trillions of dollars in raw materials, including the world's greatest untapped oil reserves in the republics bordering the Caspian Sea, including Azerbaijan, as well as Kazakhstan and Turkmenistan. The US Department of Energy estimates that 163 billion barrels of oil and up to 337 trillion cubic feet of natural gas are to be found there.
Analysts also expect the Caspian region to become a major gold producer.
Strobe Talbott's shuttle diplomacy is part of the US government's efforts to secure its dominant role in the region, and establish the stability necessary for commercial operations to go ahead. The US State Department indicated it was hopeful a framework for agreement would be in place prior to the Istanbul summit of the OSCE in November. Russia has become increasingly unhappy over US and European designs on territories it once dominated or controlled. Its active role in the region's various disputes led to accusations of possible Russian involvement in Wednesday's attack from within the Armenian government. Mass poverty, unemployment, government repression, crime, economic and social disintegration have been the lot of the broad masses of the former Soviet Union, while the separatist forces once hailed by Western governments as the seedbed of a new democracy threaten the complete destabilisation of the region.