Ransomware attack halts US pipeline operations

A cyberattack on a major U.S. pipeline that led to a partial shutdown is raising concerns that supplies of gasoline, jet fuel and diesel could be disrupted in parts of the East Coast if the disruption continues.

The Colonial Pipeline transports gasoline and other fuel through 10 states between Texas and New Jersey, delivering roughly 45% of fuel consumed on the East Coast, according to the company.

The Colonial Pipeline company, based in Georgia, said Saturday that it was hit by a ransomware attack and halted all pipeline operations to deal with the threat.

Colonial is in the process of restarting portions of its network. It said Sunday that its main pipeline remained offline, but that some smaller lines were operational. However, the company has not said when it would completely restart the pipeline.

In response to the attack, the Biden administration loosened regulations for the transport of petroleum products on highways as part of an "all-hands-on-deck" effort to avoid disruptions in the fuel supply.

If the pipeline outage persists, the industry may want to turn to barges to transport fuel, but that could require a waiver of the Jones Act, a U.S. maritime law that requires products shipped between U.S. ports to be moved by American-flagged ships.

The pipeline utilizes both common and custom technology systems, which could complicate efforts to bring the entire network back online, according to analysts at Third Bridge.

Gasoline futures ticked higher Monday. Futures for crude and fuel, prices that traders pay for contracts for delivery at some point in the future, typically begin to rise each year as the driving season approaches. The price you pay at the gas pump tends to follow.