Jamal Khashoggi’s fate is still unknown, but the repercussions of the Saudi journalist’s disappearance and reports of his killing are being felt around the Middle East, challenging US and western policy and fuelling regional tensions – while raising troubling questions about the future of the conservative kingdom.

For 10 days now, leaks and rumours from Turkish and other sources about what happened to Khashoggi in his country’s Istanbul consulate have met with blanket denials of wrongdoing from Crown Prince Mohammed bin Salman, known as MBS, and the army of loyal Twitter warriors who turn any accusation into a vicious battle of narratives.

But Saudi failure to engage directly with this issue will clearly not make it go away – as Recep Tayyip Erdoğan stated bluntly on Thursday. In Washington, Donald Trump has been forced to express concern in the face of mounting congressional and media pressure. It is uncomfortably close to home, especially given his son-in-law Jared Kushner’s much-advertised friendship with Bin Salman.

The stakes are high, involving billions of dollars’ worth of arms sales that Trump desperately wants to protect, Saudi oil supplies and foreign investment in the transformative projects that make up the ambitious Vision 2030 economic transformation plan. But the overarching issue is the kingdom’s position as the linchpin of US strategy in the Arab world, especially in the escalating confrontation with Iran.

Bin Salman has called Ayatollah Ali Khamenei, the supreme leader of the Islamic Republic, a “new Hitler”. Gulf hostility to Tehran hit a new low last month when the Saudis and their allies refused to condemn the Arab separatists who opened fire on a military parade in Ahvaz, in Iran’s Khuzistan province, killing civilians as well as Revolutionary Guards.

In November the US will re-impose its second tranche of sanctions on Iran following Trump’s unilateral withdrawal from the 2015 nuclear deal, targeting oil exports as the economic situation deteriorates. Iranian threats against the Saudis and the United Arab Emirates look likely to increase in tandem.

The damage that has been caused to the Saudis’ image has the potential to weaken American and British support – under fire domestically – over the three-year-old war in Yemen, the world’s worst humanitarian disaster, where Riyadh sees the Houthi rebels as proxies of Iran, like Hezbollah in Lebanon.

Parallels have been drawn between Khashoggi and the Observer journalist Farzad Bazoft, executed as a spy by Saddam Hussein in 1990 shortly before Iraq’s invasion of Kuwait. That killing provoked global outrage but Margaret Thatcher’s government still decided not to punish a “ruthless” regime for fear of jeopardising lucrative exports. Trump’s comments about the value of US arms sales may well mean a similar response from Washington.

Still, the difficulty of this case is that it recalls the kind of horrors perpetrated by Hussein and Libya’s Muammar Gaddafi, while the Saudis are presented as allies because of their wealth and close security cooperation. In the past they tended to intimidate, co-opt and occasionally kidnap opponents. No one doubts that Bin Salman, who is also defence minister, controls the kingdom’s key security and intelligence bodies. That means that rogue elements cannot be plausibly blamed for whatever happened in Istanbul, well-placed Saudi sources say.

“We knew MBS was thuggish but I thought it was a neighbourhood bully type of thuggishness, even if this was supposed to be an abduction that went wrong,” said one former senior Riyadh-based diplomat. “No one can respectably now support him, because everything is so associated with him – including the 2030 plan.”

Hostility between the Saudis and Turks has increased too because Erdoğan is seen as the leader of the Islamist camp and is close to Qatar – the object of the continuing Saudi-UAE-Egyptian blockade initiated by Bin Salman.

The Muslim Brotherhood, backed by Ankara and Doha, sees Riyadh and Abu Dhabi as its bitter enemies because the Gulf monarchies are moving closer than ever to Israel, albeit largely secretly, partly because of a convergence of interests over Iran, at the expense of the Palestinians.

Salman’s handling of that sensitive issue provided rare evidence, in a notoriously opaque system, that he is not always all-powerful. Leaks about his relationship with Kushner and a Saudi role in Trump’s vaunted “deal of the century” to resolve the Palestine question backfired when the US president controversially recognised Jerusalem as Israel’s capital. Soon afterwards came the news – lightly coded – that Bin Salman had been reined in by his father.

Overnight reports that King Salman had sent the governor of Mecca, the senior royal Khaled al-Faisal, to Ankara to see Erdoğan, suggested that something similar might be happening now.

Other signs of strain were detected in the change of tack on the floating of the state oil giant Aramco and in public criticism of Bin Salman by his father’s half-brother, Ahmed. Saudi-watchers are straining to see if there are more internal ructions in the wake of the Khashoggi affair – however it ends. Will young people still see the crown prince as their great hope for the future? Will family rifts grow? For the moment there are far more questions than answers.

“This is certainly very damaging to Saudi Arabia,” reflected a veteran Gulf observer, “but it doesn’t even come close to Bin Salman losing his job.”