The Khashoggi affair has weakened President Trump’s campaign to impose stringent economic sanctions on Iran aimed at reducing its influence or forcing regime change. Saudi Arabia is America’s main ally in the Arab world so when its credibility is damaged so is that of the US.
On 5 November the US will impose tough restrictions on Iranian oil exports which have already been cut by more than half since Mr Trump announced the withdrawal from the Iran nuclear agreement.
Other signatories, who disagree with him, are seeking to keep the nuclear deal afloat, but the threat of secondary sanctions on oil companies, banks and commercial companies for doing business with Iran is too great a risk for them to resist.
Iran is facing economic isolation but the US will find it more difficult to maintain a tight economic siege of the country without the sort of international cooperation it enjoyed before 2015 when sanctions were lifted as part of the nuclear deal – the Joint Comprehensive Plan of Action.
For sanctions to put irresistible pressure on Iran, they would need to be in place for years and to be enforced by many other nations. Paradoxically, the successful implementation of sanctions requires just the sort of international collaboration that Mr Trump has repeatedly denounced as being against American interests.
Mr Trump can scarcely back away from his confrontation with Iran because he has made it the principle test case for making America great again; or, in other words, the unilateral exercise of US power.
Saudi Arabia and Israel are exceptions but few other countries have a genuine interest in Mr Trump succeeding here even if they do not care much about what happens to Iran.
How has the prospect for sanctions succeeding been affected since dissident Saudi journalist Jamal Khashoggi walked into the Saudi embassy in Istanbul on 2 October and failed to re-emerge?
Saudi Arabia has certainly been weakened by turning a minor critic and dissident into a martyr and cause célèbre, a mistake that is convincing many US foreign policy and intelligence experts that the operational capacity of the kingdom is even more limited than they had imagined.
The alleged murder of Mr Khashoggi is only the latest of a series of Saudi ventures since 2015 that have failed to turn out as planned. The list includes a stalemated war in Yemen that has almost provoked a famine; escalation in Syria that provoked Russian military intervention; the blockade of Qatar; and the detention of Lebanese prime minister Saad Hariri.
For the first time, the US media is giving wall-to-wall coverage to negative stories about Saudi Arabia. One effect of this is to undermine Mr Trump’s effort to sell his confrontational policy towards Iran by demonising it as a uniquely criminal and terrorist regime. These denunciations are now being undercut by the drip-drip of allegations about the fate of Mr Khashoggi with even the case for the defence apparently resting on the claim that he was accidentally tortured to death by an overly enthusiastic security officer.
The importance of all this is that the essential political underpinnings of sanctions are being eroded.
The Iranian leadership is probably enjoying the Khashoggi scandal and wondering how it affects their long-term interests. The Iranians have a well-established reputation in the region for political cunning, but this often amounts to no more than patiently waiting for their enemies to make a mistake. They like to avoid direct confrontations and prefer long drawn out messy situations in which they can gradually outmanoeuvre their opponents.
The evidence so far is that Iran is choosing an unconfrontational response to impending sanctions. In Iraq, it has helped orchestrate the formation of a government that will once again balance between the US and Iran, but will not be vastly more pro-Iranian than its predecessor.
“It looks to me as if the Iranians were making a sort of peace offer to the Americans,” said one Iraqi politician who asked to remain anonymous.
Iran will need to make sure Iraq remains one of the many breaches in the wall of sanctions that the US is trying to build. It will probably arrange barter deals that avoid cash transactions in which, for instance, Iranian gas is exchanged for pharmaceuticals, vehicles and other imports from Iraq.
Another channel for Iranian sanction busting under Mr Obama was Turkey, so Iran will be pleased by anything that worsens US and Saudi relations with Ankara.
If sanctions fail, could Washington decide that military action might be a better option? For all his verbal belligerence, Mr Trump has yet to start a war anywhere and sounds as if he intends to force Iran to negotiate by using economic pressure alone. On the other hand, as the Khashoggi affair has demonstrated, almost anything could happen and not everybody acts in their own best interests.