Colonial Pipeline's main refined fuel lines remain shut as the United States grapples with one of the biggest ransomware cyber-attacks.
What: Colonial Pipeline Cyber-Attack
On Thursday, Colonial Pipeline, a 5,500-mile pipeline that transports roughly 45% of the Eastern Seaboard's fuel consumption, experienced a ransomware attack.
On Friday, Bloomberg reported that the hackers stole data Thursday then locked computers and demanded payment before access to the company is restored.
Shortly after news of the hacking emerged, Colonial said it "proactively took certain systems offline to contain the threat." Due to this action, all pipeline operations were halted.
The company has since said that smaller lines have been opened under manual control.
Colonial Pipeline is the largest fuel pipeline in the U.S. and it stretches from Houston to New Jersey. More than 100 million gallons of fuel are transported through the system daily.
Who and Why: The Hackers, DarkSide
Two days after Colonial's shutdown, the Federal Bureau of Investigation (FBI) confirmed earlier reports that criminal hacker gang DarkSide was behind the cyber-attack.
According to intelligence officials, DarkSide is believed to be operating from Eastern Europe, potentially Russia, and the cyber-attack is said to be an act of extortion.
On its website on the dark web, the group said it only meant to "make money and not creating problems for society." The group added that it will pick targets more carefully in the future.
DarkSide did not specifically mention Colonial Pipeline in its post.
CEO of security intelligence company Prevailion, Karim Hijazi, said in many instances, hackers have multiple stages during cyber-attacks. "We may win this battle here, but the war will continue to wage," he said.
Where: East Coast
The effect of the massive cyber-attack on Colonial Pipeline is already felt in the East Coast and even the Midwest.
On Monday, the East Coast reported a 32.5 percent increase in fuel demand compared to a week earlier, and the Midwest reported an increase of 16.2 percent.
GasBuddy, an operator of apps and websites based on real-time fuel prices in thousands of gas stations, revealed in its latest data that Virginia is the hardest-hit state in terms of disruption from Colonial's shutdown.
Since the shutdown started, 7.6 percent of the state's fuel stations reported gasoline outages. North Carolina follows close behind as 7.5 of its fuel stations are experiencing gasoline outages.
Georgia is the third hardest-hit, with 5.2 percent of its stations without gasoline, followed by Florida, with 2.7 percent of its stations running out of gasoline.
When: End of the Week?
Colonial Pipeline said it is working to reopen shuttered lines by the end of the week.
However, industry experts are concerned about the price-related effects of a prolonged shutdown, especially if the company fails to resume operations by the weekend as it projected.
Founding partner of Again Capital, John Kilduff, said the situation "turns into a crisis by the end of the week" if Colonial Pipeline does not reopen.
Energy analyst at RBC, Michael Tran, said the gas shortages and gradual price hikes in some affected states "is already an earthquake."
For Tran, Colonial Pipeline is "the single most important artery" that moves fuel products across the U.S.
