Gold prices fall in Saudi Arabia as 21k drops to 458 riyals

Saudi authorities reported on Friday that drones launched from Iraq temporarily shut down a vital oil export route used to circumvent the blockade of the Strait of Hormuz. The kingdom has ramped up reliance on the East-West pipeline, connecting the Abqaiq site near the Gulf to the Red Sea port of Yanbu, since the start of the Middle East conflict aimed at bypassing Iran's closure of the Strait of Hormuz.

The Saudi foreign ministry strongly condemned the targeting of the East-West pipeline in the Riyadh and Medina regions by multiple drones originating from Iraq, which resulted in injuries and damage. The pipeline was shut down as a precautionary measure, according to a senior energy ministry official. Satellite images from the Copernicus Sentinel Data, captured on Thursday, revealed smoke plumes near Medina, along the main path of the East-West pipeline that transports Saudi oil to its Red Sea outlet.

Iraqi Prime Minister Ali Al Zaidi's office confirmed the attack's launch from Iraqi soil and announced the dismissal of the commander in charge of the southern Maysan province. The Iraqi government unequivocally denounced the attacks on Saudi Arabia's allies, originating from within the governorate. In response, Riyadh opted not to retaliate, instead offering support to the Iraqi government to thwart future attacks from Iraq against the nation and its nearby neighbors.

Iran-backed Iraqi militias have previously been accused of targeting Saudi oil infrastructure, but Riyadh emphasized its right to safeguard its sovereignty, security, facilities, and people. Bahrain, Jordan, and Qatar also denounced the assault on the Saudi pipeline, while the Gulf Cooperation Council (GCC) condemned the escalation as unacceptable to the kingdom's security.

Oil prices surged past $100 per barrel this week, with average US diesel prices topping $6 for the first time on Friday, posing a potential challenge for President Donald Trump ahead of the midterm elections. Yemen's Iran-backed Houthi rebels declared a maritime blockade in July against Saudi Arabia, supporting the Yemeni government, targeting Saudi oil tankers in the Red Sea.

By seizing control of Yemen's Red Sea coast and the islands in the Bab Al Mandeb Strait on Friday, the Houthis fortified their stronghold on the crucial passage connecting Europe and Asia, asserting that navigation through the strait would remain safe for all but Saudi Arabia following their latest gains.