The cargo ship was reportedly hit by an "unknown weapon" and a fire broke out on its deck, prompting fears that "that this was a deliberate attack."
Video footage captured air traffic controllers telling the pilots: "This is totally a new one for us!"
The man was detained on charges of "committing several violations and taking up a post exclusively reserved for Saudis."
Hasan Hatrash tells Newsweek what it's like to celebrate change in one of the world's most conservative societies.
Saudi Arabia reopened its embassy in Baghdad in 2015 following a 25-year break.
It was the first bombing in years to attempt to target foreigners in Saudi Arabia.
The cancellation comes amid reported disagreements between British ministers over the deal.