Saudi Stocks Slide After Drone Strikes Force Shutdown of East-West Pipeline

Saudi Arabian equities opened the week lower on Sunday, giving the kingdom's market its first chance to price in drone strikes that prompted a precautionary shutdown of the East-West crude pipeline.

The benchmark index shed 1.0% in early trade. Al Rajhi Bank declined 0.8%, Saudi Arabian Mining Company fell 2.4% and oil major Saudi Aramco slipped 1.1%. Rabigh Refining and Petrochemical Company was the session's weakest performer, tumbling 7.3%.

The pipeline was taken offline after aerial strikes on Thursday hit installations across the Riyadh and Medina regions, leaving several people injured. The conduit is the kingdom's principal export route that avoids the Strait of Hormuz.

Both Riyadh and Baghdad attributed the attack to Iraqi territory, where Iran-backed militias are active. Iraq's government dismissed a senior military commander on Saturday in response.

Saudi Arabia held back from immediate military retaliation after an appeal from Iraq's prime minister, while stating that it retains the right to defend its sovereignty and critical infrastructure.

U.S. President Donald Trump on Saturday placed blame for the strikes directly on Iran.

The episode underscores long-standing exposure in regional energy infrastructure. Earlier attacks on Saudi facilities cut crude output by 2.3 million barrels per day to a three-decade low of 6 million bpd, according to the International Energy Agency.

Qatar's index moved against the regional grain, adding 0.2% on gains in petrochemical producer Industries Qatar.

Gulf foreign ministers are due to meet Iran's counterpart in an Oman-backed effort to reach an interim arrangement on managing traffic through the Strait of Hormuz.