Colonial Pipeline Attacked by Ransomware, Expected to Recover by the End of this Week

The government of USA declared emergency on Friday, after Colonial Pipeline Company, a major supplier of gasoline and diesel fuel went offline when a ransomware attacked it. The affected pipeline system is the country’s largest and according to various sources the ransomware was created by DarkSide, a criminal cyber gang.

Colonial is being considered as the primary source of gasoline and refinery products on the South and East Coast. Colonial delivers around 100 million gallon per day of the fuel and heating oil with its network of 5,500 miles of pipeline stretched from Houston refining hub to the New York harbor. Attack majorly impacted the flow of refined products from the US Gulf Coast (USGC) to US Atlantic Coast (USAC) and resulted in sparking a wave of clean tanker activity.

In a recently released statement, the officials of Colonial Pipeline mentioned, “We continue to evaluate product inventory in storage tanks at our facilities and others along our system and are working with our shippers to move this product to terminals for local delivery”.

Colonial has already started the recovery work and is able to return some of its pipeline laterals to connect some terminals and destinations for deliveries. The company is expected to return the entire system to its normal operating rates by the end of this week.

As per Kpler, a ship tracking service, data refined product imports into the USAC are increasing to fill the supply shortage, with at least 9.56 million barrels, mostly gasoline, expected to discharge in the week ended May 14, up from 8.24 million barrels in the previous week.

Prices of major commodities have been little impacted by the outage except clean tanker rates which witnessed a significant rise. The outage has caused a shift in refined products trade flows; cargoes were shifted from Gulf Coast to alleviate a surplus of stranded barrels and cargoes on the Atlantic Coast were fixed to fill a spot market shortage.

According to various reports, the attack was instigated by DarkSide, a criminal organization linked to Russia. US President Joe Biden said that Department of Energy (DOE) is working directly with Colonial to get the pipelines back online and operating at full capacity as quickly and as safely as possible. US President also added "They have some responsibility to deal with this," as he plans to meet with Russian President Vladimir Putin soon.