NEW YORK () – Gasoline futures are ticking on Monday after a cyberextortion attempt on an important U.S. oil pipeline that transports fuel from the Gulf Coast to the northeast.
Colonial Pipeline transports gasoline and other fuel across 10 states between Texas and New Jersey. According to the company, it supplies approximately 45% of the fuel consumed on the east coast.
Colonial Pipeline said on Saturday that it had been hit by a ransomware attack and stopped all pipeline operations to deal with the threat. Two people close to the investigation said the shutdown was carried out by a criminal gang known as DarkSide, which cultivates a picture of Robin Hood about corporate theft and cutting charity.
Oil and fuel futures, the prices that traders pay for supply contracts at some point in the future, usually begin to rise each year as the management season approaches. The price you pay for a gas pump tends to follow.
The average US price of regular gasoline in the last two weeks has jumped 6 cents to $ 3.02 per gallon, $ 1.05 more than a year ago. Years ago, the numbers were somewhat skewed as the nation was locked out due to a pandemic.
The attack on the Colonial Pipeline could exacerbate this upward pressure on prices if left unresolved for some time.
Futures jumped 1.5% on Monday, the biggest move in about a week, while the potential for disruption to fuel supplies is still unknown.
Colonial is restarting parts of its network. It said on Sunday that its main pipeline had remained offline, but that some smaller lines were in operation.
At the moment, swing prices can be felt mainly in the energy industry, as suppliers adapt to potential shifts in gasoline flow.
Additional fuel may come from East Cost refineries, JP Morgan said on Monday, and a longer shutdown along the Colonial Pipeline would force suppliers to look for fuel in the Midwest rather than the Persian Gulf.
In response to the attack, the Biden administration loosened regulations for transporting petroleum products on highways in an “all-in-one” effort to prevent disruptions to fuel supplies.