Fundamental analysis
10 May, 2021
Crude prices climbed more than 1% on Monday after a major cyber attack that forced the shutdown of critical fuel supply pipelines in the United States, highlighting the fragility of oil infrastructure. Signalling the seriousness of the situation, the White House was working closely with Colonial Pipeline to help it recover from the ransomware attack, which forced the biggest U.S. fuel pipeline operator to shut a network supplying populous eastern states. Colonial’s network is the source of nearly half of the U.S. East Coast’s fuel supply, transporting 2.5 million barrels per day of gasoline and other fuels, and the company had to shut all its pipelines after the cyber attack on Friday, which involved ransomware. It was not clear who carried out the attack, but sources told Reuters the hackers were likely a professional cybercriminal group. Colonial said on Sunday its main fuel lines remain offline but some smaller lines between terminals and delivery points are now operational. It didn’t say when the network might return to full operational capacity. A prolonged shutdown of the line, described as the “jugular of infrastructure” in the United States by one analyst, would cause prices to spike at gasoline pumps ahead of peak summer driving season, a potential blow to U.S. consumers and the economy.
