Top US pipeline operator shuts major fuel line after cyber attack

Top US fuel pipeline operator Colonial Pipeline has shut its entire network after a cyber attack, the company said in a statement on Friday.

Colonial’s network supplies fuel from US refiners on the Gulf Coast to the populous eastern and southern US. The company transports 2.5 million barrels per day of gasoline, diesel, jet fuel and other refined products through 5,500 miles (8,850 kilometer) of pipelines.

Colonial Pipeline says it transports 45 percent of East Coast fuel supply.

The company shut down systems to contain the threat after learning of the attack on Friday, Colonial said in the statement. That action has temporarily halted operations and affected some of its IT systems, the company said.

Colonial has engaged a third-party cybersecurity firm to launch an investigation and contacted law enforcement and other federal agencies, it said.

Colonial did not give further details or say for how long its pipelines would be shut.

“The fact that this attack compromised systems that control pipeline infrastructure indicates that either the attack was extremely sophisticated or the systems were not well secured,” said Mike Chapple, a professor at the University of Notre Dame’s Mendoza College of Business and a former computer scientist with the US National Security Agency.

“This pipeline shutdown sends the message that core elements of our national infrastructure continue to be vulnerable to cyberattack,” he added.

Reuters reported earlier on Friday that Colonial had shut its main gasoline and distillate lines.

During the trading session on Friday, Gulf Coast cash prices for gasoline and diesel edged lower.

Both gasoline and diesel futures on the New York Mercantile Exchange rose more than crude prices during the day. Gasoline futures gained 0.6 percent to settle at $2.1269 a gallon, while diesel futures rose 1.1 percent to settle at $2.0106 a gallon.

Longer-term price effects will depend on the amount of time that the lines are shut. If barrels are not able to make it onto the lines, Gulf Coast prices could weaken further, while benchmark prices in New York Harbor could rise, one market participant said. Rising benchmark prices typically lead rises in prices at the pump.

Colonial shut down its gasoline and distillate lines during Hurricane Harvey, which hit the Gulf Coast in 2017. That contributed to tight supplies and gasoline price rises in the US after the hurricane forced many Gulf refineries to shut down. Gasoline prices in the Gulf rose to a five-year high, while diesel prices rose to around a four-year high.