In 2000, negotiations as to the demarcation of the sea had been going on for nearly a decade among all the states bordering it. Whether it was by law a sea, a lake, or an agreed hybrid, the decision would set the demarcation rules and was heavily debated. Access to mineral resources (oil and natural gas), access for fishing, and access to international waters (through Russias Volga river and the canals connecting it to the Black Sea and Baltic Sea) all rest on the negotiations outcome. Access to the Volga is key for market efficiency and economic diversity of the landlocked states of Azerbaijan, Kazakhstan, and Turkmenistan. This concerns Russia as more traffic seeks to use – and at some points congest – its inland waterways. If the body of water is, by law, a sea, many precedents and international treaties oblige free access to foreign vessels. If it is a lake there are no such obligations.
Resolving and improving some environmental issues properly rests on the status and borders issue.
All five Caspian littoral states maintain naval forces on the sea.
According to a treaty signed between Iran and the Soviet Union, the sea is technically a lake and was divided into two sectors (Iranian and Soviet), but the resources (then mainly fish) were commonly shared. The line between the two sectors was considered an international border in a common lake, like Lake Albert. The Soviet sector was sub-divided into the four littoral republics' administrative sectors.
Russia, Kazakhstan, and Azerbaijan have bilateral agreements with each other based on median lines. Because of their use by the three nations, median lines seem to be the most likely method of delineating territory in future agreements. However, Iran insists on a single, multilateral agreement among the five nations (aiming for a one-fifth share). Azerbaijan is at odds with Iran over some of the sea's oil fields. Occasionally, Iranian patrol boats have fired at vessels sent by Azerbaijan for exploration into the disputed region. There are similar tensions between Azerbaijan and Turkmenistan (the latter claims that the former has pumped more oil than agreed from a field, recognized by both parties as shared).
The Caspian littoral states' meeting in 2007 signed an accord that only allows littoral-state flag-bearing ships to enter the sea.
Negotiations among the five states ebbed and flowed, from about 1990 to 2018. Progress was notable in the fourth Caspian Summit held in Astrakhan in 2014.