King Khalid succeeded his half-brother King Faisal, and during his reign from 1975 to 1982, Saudi Arabia underwent significant economic and social development. The country's infrastructure and educational system were rapidly modernized, and foreign policy was characterized by strengthening ties with the United States.

Two major events in 1979 profoundly impacted Saudi Arabia's domestic and foreign policies:

1. The Iranian Islamic Revolution: There was concern that the Shi'ite minority in Saudi Arabia's Eastern Province, where the oil fields are located, might rebel under the influence of the Iranian revolution. This fear was heightened by several anti-government riots in the region in 1979 and 1980.

2. The seizure of the Grand Mosque in Mecca by Islamist extremists: The extremists were partly motivated by their perception of the Saudi regime's corruption and deviation from Islamic principles. This event deeply shook the Saudi monarchy.^[52]

In response, the Saudi royal family enforced stricter adherence to Islamic and traditional Saudi norms (such as closing cinemas) and increased the role of the Ulema (religious scholars) in governance. However, these measures only partially succeeded, as Islamist sentiments continued to grow.^[52]

King Khalid delegated significant responsibilities to Crown Prince Fahd, who played a pivotal role in managing both international and domestic affairs. Economic growth continued swiftly, with Saudi Arabia playing a more prominent role in regional politics and global economic matters.^[48] Regarding international borders, a tentative agreement on dividing the Saudi-Iraqi neutral zone was reached in 1981, with finalization in 1983.^[48] King Khalid's reign ended with his death in June 1982.^[48]