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What Has The Colonial Pipeline Hack Meant For The Transport Sector?

What is the Colonial Pipeline hack?

Earlier this month, the operator of the country’s largest fuel pipeline, Colonial Pipeline, fell victim to a cybersecurity attack. Subsequently all pipeline operations had to be shut down, leading to concerns over supplies of gas, diesel and jet fuel.


The cybercriminal group known DarkSide, stole close to 100 gigabytes of data, threatening to leak it onto the internet if sufficient payment wasn’t made.


A third-party cybersecurity firm was hired by Colonial Pipeline to probe the incident, working alongside law enforcement and other federal agencies, such as the FBI, to try and resolve the issue.


The hack impacted some of the operator’s IT systems too.


In a statement released by the company, they said that “our primary focus is the safe and efficient restoration of our service and our efforts to return to normal operation,”.



Why would this impact the transport sector?

Colonial pipeline transports nearly half of the East Coast’s fuel supply. They operate the largest refined products pipeline in the US, transporting 100 million gallons per day.


If the outage were to persist, supplies of gasoline, diesel and jet fuel could rapidly run dry.


John Kilduff, partner at Again Capital in New York, said the day after the attack that “if there’s not a resumption of operations by tomorrow night or at least some clarity on a resumption, gasoline prices will skyrocket on the open of trading Sunday night.”


Andy Liplow, president of Liplow Oil Associates, also commented on issues which may arise if the problem was not solved quickly.


“An extended colonial pipeline outage will force refiners to reduce their operating rates as inventory in the refinery fills up,” he said.


Has this impacted the transport sector?

The American Automobile Association has said that fuel prices were heading to their highest level since 2014, with the US government relaxing rules on transporting fuel by road to help reduce issues with supply across the country. Subsequently, this allowed drivers in 18 states to work extra or more flexible hours when transporting refined petroleum products.


In spite of this, the amount of fuel which can be transported by road is nowhere near enough to match the capacity of the pipeline, an oil market analyst warned.


President Joe Biden was briefed on the incident shortly after it happened, with a White House spokesperson commenting that the “federal government is working actively to assess the implications of this incident, avoid disruption to supply, and help the company restore pipeline operations as quickly as possible,”.


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Less than 1 week after the attack, Colonial returned to normal operations, delivering millions of gallons of fuel every hour. A ransom of $5million was paid to the cybercriminals to hand back full control of the pipeline to Colonial.


In spite of this, some of the markets which Colonial supplies are still experiencing fuel shortages.

  • Washington has 80% of its gas-stations without fuel

  • North Carolina has 63% of its gas-stations short of fuel

  • Georgia has more than 40% of its gas stations short of fuel

  • South Carolina has more than 40% of its gas stations short of fuel

  • Virginia has 38% of its gas stations short of fuel


Transport Secretary Pete Buttigieg said that the attack was a “wakeup call” and demonstrated how vulnerable the US is to cyber-attacks.


The attack has clearly had a large impact on the transport sector, with those reliant on refined fuels having to spend an increased amount on the filling up. Individuals working in the trucking industry are also likely to have experienced long waits at fuel stations or diverted routes to avoid turning up to stations without access to any fuel at all.


In spite of these large disturbances to the transport sector, DarkSide wrote on its website that their goal is to “make money” rather than “create problems for society”.

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