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Saudi shares drop after drone attacks target key oil pipeline

Saudi Arabian stocks fell in the early trading on Sunday as a result of 'the market's reaction to drone attacks' on the Kingdom's East-West crude oil pipeline.

Saudi Arabia's benchmark index fell?1.0%. This was due to a 0.8% decline in Al Rajhi Bank, and a 2.4% drop in Saudi Arabian Mining Company.

Saudi Aramco, the oil giant, fell 1.1%. Rabigh Refining and Petrochemical Company plummeted 7.3% and was the worst performer of this session.

The sale 'followed an emergency shutdown of the East West pipeline on Thursday after aerial strikes 'hit installations in the Riyadh region and Medina, causing multiple injuries.

Riyadh as well as?Baghdad both traced the attack back to Iraqi territory where Iran-backed militias are active, leading the Iraqi Government to dismiss a senior military leader on Saturday.

Saudi Arabia did not immediately retaliate militarily after an appeal from Iraq's Prime Minister, but Riyadh defended its right to protect its sovereignty and vital infrastructure.

The U.S. president Donald Trump blamed Iran on Saturday for the attacks on the conduit. This is the primary alternative that the Kingdom uses to avoid the Strait of Hormuz.

According to the International Energy Agency, previous attacks on Saudi energy facilities had reduced crude production by 2.3 million barrels per day to a low of 6 millions bpd for three decades.

Qatar's benchmark Index, which is a measure of the petrochemical industry, rose 0.2%, bucking the regional trend.

The Financial Times reported that Gulf foreign ministers will meet with their Iranian counterparts in an effort to reach an interim agreement on traffic management through the Strait of Hormuz.

(source: Reuters)