Key US fuel pipeline down for fourth day as hackers issue statement

Published May 11, 2021
The attack on Colonial Pipeline is one of the most disruptive digital ransom schemes reported.
The attack on Colonial Pipeline is one of the most disruptive digital ransom schemes reported.

NEW YORK/LONDON: The US government and the top fuel pipeline operator in the United States on Monday worked to secure the network that transports nearly half of the East Coast’s fuel supplies, as the group suspected of a ransomware cyberattack that caused it to shutdown last week said it was just trying to make money.

The attack on Colonial Pipeline is one of the most disruptive digital ransom schemes reported and the resulting shutdown has disrupted fuel supply across the eastern United States, triggering isolated sales restrictions at retail pumps and pushing benchmark gasoline prices to a three-year high.

A news release issued on Monday in the name of the cyber group DarkSide, the group suspected of the attack on the pipeline, said, “our goal is to make money, and not creating problems for society”. Its statement did not mention Colonial Pipeline by name.

Lawmakers urged stronger protections for critical US energy infrastructure, and the White House has made restarting the fuel network a top priority and organised a federal task force to assess the impact and avoid more severe disruptions.

New York’s WTI crude and London Brent oil gain 0.8pc after the pipeline was put out of action

While the US government investigation into the attack is in its early stages, a former US official and three industry sources said the hackers are suspected to be a cybercriminal group called DarkSide. Cybersecurity experts said the group appears to be composed of veteran cybercriminals focused on squeezing as much money as they can from their targets.

The southeastern United States would likely be the first to see price increases at retail pumps, and demand has already picked up as drivers fill their tanks. The southeast is the most dependent on the line and has fewer alternatives than states further north, and has seen prices spike during previous shutdowns.

Gas stations in southeastern states such as Georgia, North Carolina and Tennessee were seeing some abnormal buying, fed by demand fears, said Patrick De Haan, head of petroleum analysis at GasBuddy.

“My biggest concern, as far as the consumer goes, is that you end up with a run on the gasoline supplies at the gas station, further exacerbating what is happening at the terminals,” said Andrew Lipow, president of consultants Lipow Oil Associates LLC.

Colonial said on Sunday it restarted some smaller lines between fuel terminals and customer delivery points but its main lines remained shut. It did not provide a timeline for a full restart of the 5,500 mile (8,850 km) system.

The pipeline system is the primary fuel artery from Gulf Coast refineries to Mid-Atlantic and southeast states. It moves over 2.5 million barrels per day (bpd) of gasoline, diesel and jet fuel, supplying motorists and major airports.

The Department of Transportation announced emergency measures on Sunday to facilitate deliveries, lifting driver restrictions on fuel haulers in 17 states affected by the shutdown. It could take additional measures if the outage continues.

Traders provisionally booked at least six tankers to ship gasoline from Europe to US destinations following the attack. Two European gasoline traders, however, said the market was taking a cautious approach to see how long the shutdown would last.

Meanwhile, oil prices climbed on Monday after the US pipeline was put out of action by the cyber attack. New York’s WTI crude and London Brent oil both gained about 0.8 per cent in value.

“Energy markets were unnerved by a cyber attack on a major US pipeline operator,” said Interactive Investor analyst Richard Hunter.

“As a result, the oil price added to the gains which were already being seen on higher anticipated demand.” The attack comes as prices were pushing higher in response to an expected jump in demand as the world economy gets back on track as a result of the easing Covid health crisis.

Published in Dawn, May 11th, 2021

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