Saudi Arabia’s stock market value dropped on Sunday as investors reacted to fresh attacks on the kingdom’s energy infrastructure, including the temporary shutdown of the East-West Pipeline, a key route carrying crude from the Gulf to the Red Sea. The sell-off hit energy stocks particularly hard, with base oil producer Luberef recording the market’s steepest decline.
Luberef, Saudi Aramco’s base oil producing division, experienced the market’s biggest share-price fall, tumbling 10% to SAR 127.30 (U.S.$33.95) per share, with about 1.3 million shares changing hands in trades worth SAR 170 million ($45.3 million)
The whole Tadawul All Share Index fell 1.3%, or 143 points, to 10,865, its lowest closing level in a month, according to Saudi market data provider Argaam. Trading turnover reached SAR 3.8 billion ($1.01 billion).
The decline followed a statement from Saudi Arabia’s Ministry of Energy, which said the East-West Pipeline had been targeted several times on Sept. 10 and was shut down as a precaution.
The administration in Riyadh blamed the attack on Iranian-backed militias operating in Iraq, while an Iraqi investigation reportedly traced the drone launch site to Maysan province near the Iranian border.
Investors were concerned about the potential impact of the attacks and the pipeline shutdown on Saudi Arabia’s broader energy sector. Reuters reported that the closure had raised concerns over potential crude export shortages, with the pipeline providing an alternative route around the Strait of Hormuz.
(Lubref did not respond to a request for comment before publication.)