Since Friday, the U.S. largest fuel pipeline Colonial Pipeline continues shut after a cybersecurity attack. Still, it remains unclear how long the outage will last. However, the Federal Bureau Administration identified on Monday that a hacker group known as DarkSide was responsible for the attack.
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Colonial pipeline remains shut due to cyberattack, and DarkSide group is found responsible
Today, the FBI announced it identified the hacker group DarkSide as responsible for attacking and shutting down Colonial Pipeline since last Friday. As a result, the pipeline remains shut, and it is unclear when the outage will come to an end.
On Friday, Colonial acknowledged that its corporate computer network had been hit. In that way, the attack crippled a company that supplies 45 percent of the East Coast’s fuel. For now, Colonial Pipeline remains silent regarding when it would restart operations.
Currently, Colonial Pipeline operates the country’s largest refined products pipeline. Similarly, it transports 2.5 million barrels per day and connects refineries from the U.S. Gulf Coast to more than 50 million people in the South and East.
Even though the shutdown hasn’t had a significant impact on gasoline, diesel, and jet fuel markets thus far, analysts warn that a prolonged downtime could lead to several consequences—for instance, higher gas prices due to a demand rise.
Scenarios and actions to overcome the situation
In this sense, Wells Fargo said to CNBC that the restart date is critical. Therefore, the firm outlined three scenarios for reopening that could help investors gauge the possible impact.
First, if the outage lasts fewer than five days, there will be “no significant or lasting impacts.” Second, if the pipeline remains shut from six to 10 days, inventories will rise in the U.S. Gulf Coast, causing prices to fall. Third, with more than ten days, fuel shortages are expected in the interior Southeast of the U.S.
Similarly, as a temporary solution, analysts from RBC Capital Markets said in a note that the East Coast could draw down inventories. Also, they could rely on other districts, or increase gasoline imports, however, leading to higher prices.
In fact, cybercrime is on the rise since U.S. officials note that the frequency and sophistication of ransomware attacks have soared in recent months. Notably, companies are often reluctant to reveal much information about these attacks. Finally, the attack on Colonial Pipeline comes months after news of the hacking of the network services provider SolarWinds, which Russia has been accused of orchestrating.
Finally, the cyber-criminal gang that took a major US fuel pipeline offline over the weekend, DarkSide, acknowledged the incident in a public statement. Accordingly, the U.S. issued emergency legislation on Sunday after the cyberattack. According to the hackers, their “goal is to make money and not creating problems for society.”
