Fears of spiked gas, oil and diesel prices struck the eastern United States after a Friday night ransomware cyberattack shut a pipeline overseen by company Colonial Pipeline. Energy, oil and gas analysts immediately cautioned that any prolonged outage on the 5,500 miles of pipeline could cause major disruptions and an increase in gas pump prices along the East Coast.
Colonial Pipeline, the country's largest refined products pipeline operator, has not said who they suspect carried out the cyberattacks that typically involve criminal hackers seizing data and demanding payment for its return.
Gas and diesel prices have spiked during Colonial shuts before, including a 2017 leak that led to extreme price gouging in the days which followed. But many oil and gas experts were optimistic Saturday morning that no gas price spike would occur for U.S. drivers and truckers if the shut was only temporary.
"The challenges brought on by the Colonial Pipeline shut down would likely not appear for several days or longer. My guess is they'll be able to restart the pipeline before any major issues develop. This should NOT be a pricing event- but this may be a supply event," remarked Patrick De Haan, an oil and refined products expert. "By 'pricing event' I meant not one motorists will generally 'see' that is, not an overnight spike."
The challenges brought on by the Colonial Pipeline shut down would likely not appear for several days or longer. My guess is they'll be able to restart the pipeline before any major issues develop. This should NOT be a pricing event- but this may be a supply event.
— Patrick De Haan ⛽️📊 (@GasBuddyGuy) May 8, 2021
Oil analyst Andy Lipow told the Associated Press that the length of the pipeline shut is crucial, with an outage of five to six days potentially causing shortages and price hikes for motorists ranging from central Alabama up to Washington D.C.
Another U.S. energy company told the AP that it was forced to "temporarily halt" all operations on a pipeline that delivers about 45 percent of all fuel consumed by Eastern Seaboard states.
The last reported shut of the pipeline was in October 2020 during Hurricane Delta. The Colonial shut its main distillate fuel line down on October 11 after the hurricane disrupted electric power and halted transport between Houston and Greensboro, North Carolina.
Colonial Pipeline announced Saturday morning that its working to restore operations and hired a third-party cybersecurity firm to investigate the targeted ransomware attack. The company issued a statement saying it "proactively took certain systems offline to contain the threat, which has temporarily halted all pipeline operations, affected some of our IT systems."
Federal law enforcement agencies were informed of the likely cyberattack, the company said. A senior threat analyst at the cybersecurity firm Recorded Future told the AP that the attack may have used a ransomware group called "DarkSide."
The FBI on Saturday afternoon confirmed it's actively investigating the pipeline hacking incident.
"FBI was notified of a network disruption at Colonial Pipeline on May 7, 2021 and is working closely with the company and government partners. We have nothing additional to share at this time," the bureau announced.
Colonial Pipeline is the primary source of gasoline, diesel and jet fuel for the entire East Coast, with a capacity of 2.5 million barrels per day traveling anywhere between Texas and North Carolina.
Updated 5:19 PM ET.
