The festivities of the centennial celebrations marked a century of unity, prosperity and modernisation, according to official narratives; but they also concealed a fermenting internal crisis that erupted as the third Saʿudi state entered the second millennium. The twenty-first century started with three major challenges: first, a fragmented state, headed by an ailing King; second, a strained economy, under the pressure of low oil prices, unemployment and national debt; and third, terrorism.

Added to the internal challenges was the troubled relationship with the USA that followed 9/11, and tense relations with other regional players – mainly Qatar, Iran and Syria. Saudi Arabia found itself criticised by the US administration and media, while Qatar, a neighbouring Gulf country, used its newly founded al-Jazeera television channel to put pressure on Saudi Arabia in order to gain some economic concessions relating to territorial disputes, and its oil and gas expansion. Saʿudi relations with Syria and Iran deteriorated following the assassination of pro-Saʿudi Lebanese prime minister Rafiq al-Hariri, the occupation of Iraq in 2003 and the Israeli invasion of Lebanon in 2006.

Some of Saudi Arabia's internal challenges subsided after the oil boom of 2003. By 2008 royal politics had stabilised, the stagnating economy was energised and the threat of terrorism had been contained. The relationship with the USA had improved by the time Crown Prince ʿAbdullah became King in August 2005.