Over the weekend, we experienced what experts are calling the most significant attack on energy infrastructure in the United States in history. Experts are now raising concerns that there may be a disruption in supplies. Colonial Pipeline carries around 45% of all gasoline and diesel fuel that is used on the East Coast, and a disruption of that magnitude could have significant effects on the entire nation.
As a result of the attack, Colonial Pipeline “took certain systems offline to contain the threat, which has temporarily halted all pipeline operations.” Commerzbank analyst Carsten Fritsch warned that “If the pipelines were to remain out of action for any length of time, this would have far-reaching effects on the oil market not only in the U.S., but also in Europe.” Fritsch went on to claim that disruptions should be limited and things should be resolved in a matter of days.
Yury Dvorkin, assistant professor of electrical and computer engineering at the New York University Tandon School of Engineering, told FOX Business that if the shutdown lasts longer then a few days, we could see a price rise similar to the rise we saw after Hurricane Sandy.
The FBI has now confirmed that the professional cyberattack gang, Darkside, was behind the attack. This is a group that is believed to be based out of Russia.
Colonial Pipeline has announced that they expect to be mostly operational by the end of this week, but it looks like things are going to get worse before they get better. Many gas stations along the eastern seaboard are experiencing long lines and dozens have already announced that they are completely out of gas. North Carolina has now declared a state of emergency due to the shortages.
This wouldn’t be the first cyberattack committed by groups based in Russia either. In December 2020, another large scale cyberattack took place targeting SolarWind, which is a major technology firm based out of Austin, Texas. Hackers were able to spy on private companies, including the elite cybersecurity firm FireEye. This hack effected the Department of Homeland Security and the Treasury Department.
This is just another reminder that you must be prepared and always prepared for disruptions. We have a very fragile supply chain already and it’s not going to take much for things to get out of control fast and I fear that it’s only a matter of time. You are already seeing significant price increases in essential items like food and an attack of this size is only going to contribute more to that.