Mercedes boss Toto Wolff believes Ferrari and Red Bull are closer than they ever have been during F1's new turbo era.
Although Lewis Hamilton won in both Monaco and Canada, he was pushed all the way by Red Bull's Daniel Ricciardo in Monte Carlo and then Ferrari's Sebastian Vettel in Montreal.
Championship leader Nico Rosberg, meanwhile, could only manage seventh in Monaco and spun in the closing stages of Sunday's Canadian Grand Prix as he chased down Red Bull's Max Verstappen for fourth.
"The speed of both the Ferrari and Red Bull is pretty much where we are now, as demonstrated by the battle between Nico and Max late in the race," said Wolff.
"We are seeing the convergence of performance between teams that naturally comes with stable regulations - and that has made the competition tougher than ever."
Rosberg added: "Ferrari and Red Bull are very close to our pace now, so any tiny difference we can find this weekend could make the difference."
Earlier this week, Wolff had identified improving the team's race starts as a priority ahead of the next race in Azerbaijan.
"To be fair, we had some great starts at some of the last races, but Canada wasn't great," Wolff told F1's official website.
"We have to analyse what happened. Ferrari had a much better start - we have to accept that."
As it turned out, Hamilton won the race in Canada after re-inheriting the lead thanks to a bad strategy call by Ferrari, but the margin to Vettel behind him was just over five seconds, Mercedes' smallest winning margin this season.
"Ferrari have gained [after the engine upgrades they introduced] - and so have Renault. In terms of engine power, they almost equal us," said Wolff.
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As well as starts, Wolff will also have the ongoing rivalry between his drivers to consider, after Hamilton and Nico Rosberg made contact at the first corner in Montreal.
The clash left Rosberg needing to fight back from the midfield, having started in second.
Wolff agrees with Rosberg's stance on the collision that it was a "hard manoeuvre", but is happy to let his drivers race each other as long as they do not put their chances of finishing at risk.
"From a team perspective, when you make the front row of the grid and come out of the first corner in P2 and P9 - that is not pleasant to say the least," said Wolff.
"But for me, it feels like deja vu, as we are having these discussions after every race. That's probably what you get if you let your guys race. As long as they don't crash out like they did in Barcelona, we are fine with it."
And what about Rosberg's title challenge? The German's lead at the top of the championship has now been cut to nine points, having been 43 just two races ago in Spain.
Rosberg won the first four races of the season but hasn't made the podium at the last three. Wolff, however, doesn't see any reason to be concerned.
"These are those kind of questions that immediately pop up. Remember, he won seven races in a row and everybody was writing about the 'phenomenon'.
"Now after only three not-so-easy races, you better keep quiet. Anything else would be unfair."
What's for certain though, is that Mercedes' dominance is looking ever more under threat. They've had just three double podium finishes at the seven races so far this season - compare that with seven out of seven at the same stage last year.
As Wolff says: "Let's see what the next race brings, because Baku is obviously a power sensitive track. It will get very interesting there."