Iran is a country located in the Middle East bordering the Gulf of Oman, the Persian Gulf, and the Caspian Sea. It has a strategic location on the Persian Gulf and Strait of Hormuz, which are vital maritime pathways for crude oil export. Neighboring countries include Afghanistan, Armenia, Azerbaijan, Iraq, Pakistan, Turkey, and Turkmenistan. The government system is a theocratic republic. The chief of state is the Supreme Leader and the head of government is the President. Iran has a largely controlled economic system in which the central government directs the economy regarding the production and distribution of goods but there is some private sector activity.