The U.S. declared a state of emergency following a cyber-attack on the Colonial Pipeline and an industry analyst said if the problem isn't resolved by Tuesday a "domino effect" will have a significant effect on the fuel industry.
State of Emergency
The country's largest fuel pipeline was the victim of a ransomware attack that sources said was initiated by the DarkSide gang.
The attackers demanded a ransom Friday with threats that failure to pay would result in widespread data leaks.
Independent oil market analyst Gaurav Sharma said the U.S. government was "in big trouble" if it can't fix the problem by Tuesday. There has been a buildup of fuel stranded at Texan refineries.
"The first areas to be impacted would be Atlanta and Tennessee - then the domino effect goes up to New York," Sharma said.
According to Sharma, oil futures traders are "scrambling" to meet domestic demand after Colonial was forced to shut.
Prices Expected to Skyrocket
Fuel demand continues to increase. It is expected gasoline prices will rise if Colonial can't be restored.
Trading in gasoline futures saw an increase of more than 3% Sunday - the biggest increase since 2019.
Industry experts said southeastern states should expect a disruption in prices. These areas are the most dependent on Colonial.
Head petroleum analysis at GasBuddy, Patrick DeHaan, said demand in Tennessee, Florida, Georgia and Alabama saw an increase of 4.3% Saturday compared with the previous week.
There are no alternative pipelines in the southeast.
Colonial: Restarting Operations Only when It's Safe
More than 48 hours have passed since the attack and Colonial said Sunday it was still working on restarting operations when it is "safe to do so."
Pipelines play a critical role in the U.S.
Over the past few months, hackers have increasingly attempted to break into essential services and this latest raised concerns for other essential industries that might be vulnerable.
