This article explores the links between the remarkable change in Russian-Turkish foreign relations in the early 2000s and the geostrategic importance of the Caucasus for global energy security. For much of the 1990s, domestic instability and power distribution distracted both countries’ focus on regional issues. Mutual suspicion dominated the bilateral relations, when Turkey, a longstanding NATO stronghold with close ties to the United States and Europe, set out to gain ground in Russia’s traditional sphere of influence. The resulting strategic division of the Caucasus marked a period of continuity in Russian-Turkish relations and resembled the bipolar bloc formation of Cold War times. By drawing on the distinct accounts of Neo-Realism and Liberal Intergovernmentalism, this analysis provides an understanding of the determining factors that changed Russian-Turkish relations from standstill to intensified cooperation despite that national interests in the region proved to be largely consistent. Russia seeks to maintain its traditional hegemonic position and Turkey strives to become a ‘soft power’ in the region. However, central to the new phase of Russian-Turkish relations is a mutual interest in the Caucasus as a stable transport corridor for Caspian energy resources to European and global markets, and both Ankara and Moscow stand to benefit greatly from reconciling geopolitical competition and cooperation in the region.