U.S. Gasoline Futures Rise 1.5% After Colonial Pipeline Ransomware Attack

A cyberextortion attempt on the Colonial Pipeline had gasoline futures up 1.5% on Monday after a ransomware attack brought pipeline operations to a halt.

The pipeline is responsible for the delivery of about 45% of all fuel consumed on the East Coast, according to the company, transporting fuel between the Gulf Coast and Northeast. The company told the Associated Press on Saturday that the attack was executed by DarkSide, a criminal cybergang.

Colonial Pipeline is still restarting portions of its network and said Sunday that its main pipeline was still offline. The attack could further increase prices if the company is unable to resolve the attack for a period of time.

For more reporting from the Associated Press, see below.

Colonial Pipeline
In this September 8, 2008, file photo, traffic on Interstate-95 passes oil storage tanks owned by the Colonial Pipeline Company in Linden, New Jersey. A major pipeline that transports fuels along the East Coast said it had to stop operations because it was the victim of a cyberattack. Colonial Pipeline said in a statement late Friday that it "took certain systems offline to contain the threat, which has temporarily halted all pipeline operations, and affected some of our IT systems." Mark Lennihan, File/AP Photo

Two people close to the investigation said that the shutdown had been carried out by a criminal gang known as DarkSide that cultivates a Robin Hood image of stealing from corporations and giving a cut to charity.

Futures for crude and fuel, prices that traders pay for contracts for delivery at some point in the future, typically begin to rise each year as the driving season approaches. The price you pay at the gas pump tends to follow.

The average U.S. price of regular-grade gasoline has jumped 6 cents over the past two weeks, to $3.02 per gallon, which is $1.05 higher than a year ago. Those year-ago numbers are skewed somewhat because the nation was going into lockdown due to the pandemic.

For the moment, seesawing prices may be felt mostly within the energy industry as suppliers adjust to potential shifts in the flow of gasoline.

More fuel may be sourced from East Cost refiners, J.P. Morgan said Monday, and an extended outage along the Colonial Pipeline would force suppliers to seek fuel from the Midwest, rather than the Gulf.

In response to the attack, the Biden administration loosened regulations for the transport of petroleum products on highways as part of an "all-hands-on-deck" effort to avoid disruptions in the fuel supply.

Fossil Free
Activists display banners referring to the shutting down of existing oil pipelines in the northern United States at Black Lives Matter Plaza in Washington, D.C., on April 1, 2021, one block from the White House. Photo by Daniel SLIM / AFP/Getty Images