A ransomware cyberattack forced the largest fuel pipe in the United States to shut down on Friday night. The administration of President Joe Biden, in response, declared a state of emergency on Sunday, as pipes remain out of order -- and may continue for days.
The New York Times reported that Colonial Pipeline, the operator of the system, carries at least 45% of the fuel supply on the East Coast or 2.5 million barrels a day.
The ransomware, as reported by BBC, forced the operator to halt its 5,000 pipelines.
Colonial Pipeline forcibly shuts down its system as a precautionary move to prevent hackers from obtaining data that could control parts of the pipeline, the company said in a statement.
The state of emergency announcement provides leeway for fuel to be transported via road. It is an alternative to the thousands of pipelines deemed useless -- minimizing the impact of the cyber attack.
Colonial has not yet confirmed if it is willing to pay the ransom. Also, it is unclear when the operations of its pipelines resume. Thus, experts are predicting a sharp increase in fuel prices.
Are Fuel Prices Looming to Rise?
As New York Times reported, Tom Kloza, global head of energy analysis at Oil Price Information Service, said that Americans should anticipate a 2 to 3 percent increase by Monday.
Prices are likely to go up as high as $3, which is the first time since 2014, Jay Hatfield, chief executive of Infrastructure Capital Management, said via New York Times.
If ever the service interruption persists until Tuesday, Atlanta, Tennessee, then New York is in "big trouble," Independent oil market analyst Gaurav Sharma told the BBC.
On the other hand, Bloomberg also notes that fuel suppliers have become nervous about the possible supply shortage.
The shutdown, even temporary, will likely have a significant impact on fuel prices in the U.S.
Efforts to Restore Pipeline Service
However, the U.S. government and Colonial are doing their best to mitigate such effects.
"These actions temporarily halted all pipeline operations and affected some of our IT systems, which we are actively in the process of restoring," Colonial said in a statement.
The pipeline operator further said that they will be restoring its services once they find it safe to do so. Furthermore, the U.S. government, on their part, eased up restrictions on traveling the fuel on land.
Ransomware and U.S.
Ransomware is a cyberattack that holds hostage the information that the attacker will release for a ransom. And government agencies are the usual victim.
In recent news, a ransomware group attacked the D.C police department. It was the 26th time a government agency's cybersecurity was compromised. The third for a police department.
Apple is also one of the latest victims of ransomware.
This article is owned by Tech Times
Written by Teejay Boris