Colonial Pipeline CEO warns of possible fuel shortages following cyberattack
Gas stations supplied by the pipeline were reporting shortages Monday evening
Despite plans to reopen a major U.S. fuel pipeline later this week, following a cyberattack by a gang of hackers, Colonial Pipeline CEO Joseph Blount warned state officials Monday to be ready for possible fuel shortages.
In a private meeting, Blount said the company wouldn’t resume shipments until the ransomware had been removed, Bloomberg reported, citing someone who was at the discussion.
Blount reportedly maintained that the company has full control over the pipeline and is working with refiners, marketers, and retailers to prevent further outages, according to the source.
The company says it is manually operating a portion of the pipeline that runs from North Carolina to Maryland and expects to resume full services by the weekend.
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Meanwhile, gas stations supplied by the pipeline were reporting shortages Monday evening. Patrick De Haan an oil and refined products analyst tweeted that Virginia was reporting 5% of stations without gasoline and rising."
The 5,500 Colonial Pipeline, which delivers about 45% of the fuel consumed on the East Coast, halted operations last week after revealing a ransomware attack that it said had affected some of its systems.
On Monday, U.S. officials sought to soothe concerns about price spikes or damage to the economy by stressing that the fuel supply had so far not been disrupted, and the company said it was working toward "substantially restoring operational service" by the weekend.
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Nonetheless, the attack underscored the vulnerabilities of the nation's energy sector and other critical industries whose infrastructure is largely privately owned. Ransomware attacks are typically carried out by criminal hackers who scramble data, paralyzing victim networks, and demand large payments to decrypt it.
Gasoline futures ticked higher Monday. Futures for crude and fuel, prices that traders pay for contracts for delivery in the future, typically begin to rise anyway each year as the driving season approaches. The price you pay at the 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. The year-ago numbers are skewed somewhat because the nation was going into lockdown due to the pandemic.
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The attack on the Colonial Pipeline could exacerbate the upward pressure on prices if it is unresolved for a period of time.
The Associated Press contributed to this report.