This paper sheds light into the linkages between regional political leadership and energy policy. Looking at the role of Azerbaijan in the South Caucasus, it argues that a hydrocarbons producing and transit state can maximize its position within an energy transportation network to become a regional leader. It first demonstrates that Azerbaijan has benefitted from the attention towards the Caspian energy scene to get closer to the EU and the United States. The development of a Caspian energy transportation system has enabled the Azerbaijani state oil company, SOCAR, to secure its commercial position domestically and to expand regionally. This regional expansion, coupled with the rising importance of natural gas across the Caspian hydrocarbons system, has supported the rise of Azerbaijan as a regional political leader. This paper concludes that Azerbaijan`s regional influence relies on SOCAR’s business network, that energy is the country’s preferred tool for exerting power and that its regional expansion helps Baku both to increase its revenues and to influence regional politics that may conflict with its vital interests.