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With the eyes of the world carefully monitoring tensions in the Middle East, Saudi Arabia has increasingly found itself at the center of political scrutiny in its internal and external relations. With its military capabilities largely dependent upon the United States and other Western forces, Saudi Arabia cannot concentrate on internal change at the expense of external security. At the same time, growing uncertainties in the world energy market continue to have an impact upon nearly every facet of the Saudi economy. With King Fahd's health in question, and Crown Prince Abdullah already in his mid-seventies, the world ponders how future changes in the regime will affect the delicate balance in the region. This study looks beyond a narrow definition of political stability to examine the implications of the changes in Saudi external relations with Iran and Iraq, as well as cooperation with the other Southern Gulf States. It explores the succession issue in the Royal Family, the immediate political probabilities, and the generational changes that are occurring. Saudi Arabia faces ongoing demographic problems, as well as the need to diversify and restructure its economy. The Kingdom must find a way to adapt its traditional culture, religious customs, education, and political structure to the needs of a modern nation. Such change will come neither quickly nor easily.