Geographically, Iran is located in West Asia and borders the Caspian Sea, Persian Gulf, and Gulf of Oman. Its mountains have helped to shape both the political and the economic history of the country for several centuries. The mountains enclose several broad basins, on which major agricultural and urban settlements are located. Until the 20th century, when major highways and railroads were constructed through the mountains to connect the population centers, these basins tended to be relatively isolated from one another.

Typically, one major town dominated each basin, and there were complex economic relationships between the town and the hundreds of villages that surrounded it. In the higher elevations of the mountains rimming the basins, tribally organized groups practiced transhumance, moving with their herds of sheep and goats between traditionally established summer and winter pastures. There are no major river systems in the country, and historically transportation was by means of caravans that followed routes traversing gaps and passes in the mountains. The mountains also impeded easy access to the Persian Gulf and the Caspian Sea.

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