The operator of a major gasoline pipeline in the U.S. shut down operations late Friday following a ransomware attack pipeline system that transports fuel across the East Coast. The attack is unlikely to affect gasoline supply and prices unless it leads to a prolonged shutdown of the pipeline, experts said.
Colonial Pipeline did not say what was demanded or who made the demand. Ransomware attacks are typically carried out by criminal hackers who seize data and demand a large payment in order to release it.
The company is the main source of gasoline, diesel, and jet fuel for the East Coast with a capacity of about 2.5 million barrels a day on its system from Houston as far as North Carolina, and another 900,000 barrels a day to New York. It presents a new challenge for an administration still dealing with its response to major hacks from months ago, including a massive breach of government agencies and corporations for which the U.S. sanctioned Russia last month.
President Joe Biden was briefed on the incident on Saturday morning, a White House spokesperson said and added that the federal government is working with the company to assess the implications of the attack, restore operations and avoid disruptions to the supply. The government is planning for various scenarios and working with state and local authorities on measures to mitigate any potential supply issues.
“We’ve seen ransomware start hitting soft targets like hospitals and municipalities, where losing access has real-world consequences and makes victims more likely to pay. We are talking about the risk of injury or death, not just losing your email,” said Ulf Lindqvist, a director at SRI International who specializes in threats to industrial systems.
After the shutdown was first reported on Friday, gasoline and diesel futures edged slightly higher on the New York Mercantile Exchange. Gasoline gained 0.6% while diesel futures rose 1.1%, both outpacing gains in crude oil. Gulf Coast cash prices for gasoline and diesel edged lower on prospects that supplies could accumulate in the region.
Colonial previously shut down its gasoline and distillate lines during Hurricane Harvey, which hit the Gulf Coast in 2017. That contributed to tight supplies and gasoline price rises in the United States after the hurricane forced many Gulf refineries to shut down.
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