Colonial Pipeline, what happened in the US (and to oil)
Oil rises after cyberattack on Colonial Pipeline, one of the largest American pipeline operators. The company forced to shut down the entire network
Oil prices continue to rise due to the blockade of the main US oil pipeline caused by the cyber attack which continues for the third consecutive day.
The weekend ransomware attack on the Colonial Pipeline, the key energy infrastructure of the United States, forced the company to shut down the entire network, but the timing for the restart is not yet clear.
Mid-session, WTI crude oil futures rose 0.54% to $ 65.25 a barrel, Brent futures by 0.66% to $ 68.73. According to experts, fuel prices are likely to rise 2-3% on Monday, but the impact will be much worse if it lasts much longer.
US Secretary of Commerce Gina Raimondo reported that the federal government is working to avoid supply freezes.
For the time being, experts rule out that the attack and its aftermath could translate into significant increases in fuel prices at the pump. But last weekend's attack is the worst ever launched against a critical US infrastructure, and puts the vulnerability of the latter back at the center of political debate in the US.
The interruption comes as the sustained pace of anti-Covid vaccination campaigns continues to improve the outlook for fuel demand ahead of the expected peak for the summer season.
All the details.
RANSOMWARE ATTACK
A cyber attack resulted in the closure of the main US oil pipeline, the Colonial Pipeline. This was announced by the same company, stating that it had only learned of the attack on 7 May.
It was ransomware that infected the systems running the pipeline. That is a type of malware that restricts access to infected devices and requires a ransom to be paid for the system to function normally again.
THE MAJOR PIPELINE IN THE UNITED STATES
The Colonial Pipeline is one of the largest pipelines in the United States, which carries refined gasoline and jet fuel along the east coast from Texas to New York.
The infrastructure transports over 378 million liters of gasoline and other fuels to the east coast per day, equal to approximately 45% of the fuel consumed in the area.
THE RESPONSE OF COLONIAL PIPELINE COMPANY
In response to the attack, the Colonial Pipeline Company had to "take some systems offline to contain the threat, temporarily suspending all pipeline operations."
It has since shut down the 8,850-kilometer pipeline network.
“Right now, our primary concern is the safe and effective restoration of our service. This process is already underway and we are working tirelessly to minimize the inconvenience of our customers ”, the company specified in the statement.
On Sunday evening, the company announced that although its four main lines remain offline, some smaller side lines between terminals and delivery points are now operational.
RESTART ACTIVITIES
The Biden administration is also working closely with the company in efforts to restart operations.
"Right now it is a direct effort on the bridge … we are working closely with the company and state and local officials to ensure that we return to normal operations as quickly as possible and there are no interruptions in the offering," said the US Secretary of Commerce, Gina Raimondo.
The attack comes just as the US energy industry is preparing to meet rising fuel demand as air travel resumes.
BIDEN DECLARES THE STATE OF EMERGENCY
American President Joe Biden has declared a state of emergency, to ensure that some measures are activated such as road transport of fuel and the extension to American hauliers of daily working hours, to allow faster delivery of supplies.
THE PRICES OF OIL
Meanwhile, the price of crude oil is rising. Oil prices are rising and have been at their highs for almost two months.
WHAT ANALYSTS SAY
According to the Wall Street Journal, the fuel markets are not expected to suffer major repercussions unless the pipeline is closed for several days.
Crude oil prices are likely to rise at several fuel distribution points – including Wilmington in North Carolina, Charleston in South Carolina and Savannah in Georgia – Tank Tiger CEO Ernie Barsamian told Bloomberg .
Independent oil market analyst Gaurav Sharma told the BBC that there is now a lot of fuel in Texas refineries. "Unless they resolve by Tuesday, they are in big trouble," Sharma stressed. "The first areas to be affected would be Atlanta and Tennessee, then the domino effect goes all the way to New York".
Crude oil prices are supported “by the cyber attack against the Colonial Pipeline company,” as well as the prospects for improving global demand, said Ipek Ozkardeskaya, analyst at Swissquote Bank.
DARKSIDE BEHIND THE CYBER ATTACK ON COLONIAL PIPELINE
Responsible for the cyber attack on the Colonial Pipeline would be the criminal organization known as DarkSide. The latter claims to steal funds from large companies and corporations to distribute to charities. This was reported by US investigative sources.
THE COMMENT OF FEDERPETROLI ITALIA
"At least as far as I can remember, this is the first time I have witnessed a cyber attack on an oil infrastructure such as one of the most important pipelines in the world by size, the Colonial Pipeline network" in the United States, the president told La Presse. by FederPetroli Italy Michele Marseille. "We are talking about about 9 thousand kilometers of pipeline, we could almost compare it to our Tap".
“In these hours – underlines Marseille – crude oils will also suffer strong shocks of volatility, mainly the US WTI crude oil. There will be strong crude oil supply operations on the financial markets through spot loads to temporarily meet the needs of the American coasts ”.
COMPROMISE THE ENERGY DEPENDENCE
"For some time also in Italy the corporate Security divisions have been investing with continuous research and studies on the new era of cyber terrorism, mainly in refineries and offshore platforms" continued Marseille.
“And it is normal for a state of emergency to be declared for such logistical and detention damage, especially for a country like the United States. The most surprising thing is to see a country like the US increasingly globalized and at the forefront of internal security techniques and measures, at the same time being subjected to such attacks, albeit cyber-attacks which compromise, in a few hours, its total dependence. energy ".
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/colonial-pipeline-che-cosa-e-successo-negli-usa-e-al-petrolio/ on Mon, 10 May 2021 13:05:48 +0000.