There's about a 50-50 chance that tensions between the United States and Saudi Arabia significantly escalate, retired Adm. James Stavridis told CNBC on Monday.
International outcry over the disappearance of journalist Jamal Khashoggi is already growing. On Monday, President Donald Trump said he would "immediately" send Secretary of State Mike Pompeo to meet with Saudi Arabia's King Salman. Trump also suggested "rogue killers" might have murdered Khashoggi.
"This is the first true foreign policy crisis of the administration," said Stavridis, former NATO supreme allied commander.
King Salman has ordered an internal investigation into the disappearance of Khashoggi, who was last seen entering the Saudi consulate in Istanbul on Oct. 2. The journalist, a Saudi national, is a critic of the royal family and lives in the U.S. under self-imposed exile.
"If we don't get answers as to what happened, this could get very inflamed," Stavridis said on "Power Lunch."
"Who's the big winner? Iran, which will continue to press across the entire region and the potential for instability rises," he said.
Stavridis called Pompeo's pending visit a good move.
"We can't just let this go. That doesn't mean that we're going to end up absolutely shattering this vital relationship with the kingdom but we're going to have to have some answers before we take next steps, which could include some level of sanctions," he said. "That's the path that gets us down in flames."
Those sanctions could start as diplomatic, such as expelling the Saudi ambassador, and could move to sanctions against Saudi companies doing business with U.S. firms and other companies doing business with the kingdom, Stavridis said. Another possibility is withdrawing military support for Saudi Arabia in Yemen, he added.
However, it is too soon to have that conversation. 'We've got to get through a legitimate investigation first," Stavridis said.
Fred Kempe, president and CEO of public policy group the Atlantic Council, said while it could turn into a foreign policy crisis, he pointed out that there has been a U.S.-Saudi Arabia relationship since 1945.
"Ever since then, one has looked the other way at some of the more controversial aspects of Saudi Arabia because there was just so much at stake with the relationship," he said on "Closing Bell."
Therefore, Kempe thinks Pompeo will "find a way around this."
"I was really interested in the president's term, 'rogue killers.' That may be the escape hatch," he added.