A cyberattack during the weekend caused the shutdown of the Colonial pipeline, which carries some 45 percent of the gasoline and diesel fuel the East Coast of the U.S. consumes, media have reported, noting that the attack could threaten the security of gasoline supply and push up prices.
Gasoline futures immediately jumped on the news of the attack, adding 2 percent.
According to the Wall Street Journal, Colonial Pipeline Co. learned on Friday that it had become the target of a cyberattack and that it “took certain systems offline to contain the threat, which has temporarily halted all pipeline operations.”
The New York Times reported that Colonial Pipeline Co. had declined to say when it will reopen the pipeline, fueling fears about the supply of gasoline on the East Coast.
Reuters cited experts as saying the outage will not have an impact on prices at the pump unless the Colonial pipeline remained shut for more than three days.
The Colonial pipeline is the biggest pipeline infrastructure in the United States, running 5,500 miles from Houston to Linden, New Jersey, carrying some 2.5 million barrels of gasoline and diesel daily.
Reuters quoted the head of petroleum analysis at GasBuddy as warning against panic buying in anticipation of shortages as this could cause a spike in prices without any fundamental reason.
The report, however, also cited a statement by the American Automobile Association, which said that "The shutdown can have a large impact if it is prolonged."
In addition to the direct threat of supply shortages if it lasts, the outage has also highlighted the vulnerability of critical energy infrastructure to cyberattacks. There are several suspects for the ransomware attack and, according to investigators cited by Reuters, it could be a new group rather than an established cybercrime organization. While new, the group appears to be well organized and made up of experienced hackers, Reuters also reported.
By Irina Slav for Oilprice.com
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