Colonial Pipeline closes pipeline operations after a cyber assault

A police officer guards the gate to the junction and tank terminal of the Colonial Pipeline Co. Pelham in Pelham, Alabama, USA, on Monday, September 19, 2016.

Bloomberg | Bloomberg | Getty Images

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

Colonial’s network supplies fuel from US refineries on the Gulf Coast to the populous eastern and southern United States. The company transports 2.5 million barrels of gasoline, diesel, jet fuel and other refined products over 8,850 km of pipelines every day.

According to the Colonial Pipeline, 45% of the fuel supply is transported on the east coast.

The company learned of the attack on Friday and took systems offline to contain the threat, the statement said. This measure temporarily ceased operations and affected some of its IT systems.

The company hired a third-party cybersecurity firm to open an investigation, and Colonial has reached out to law enforcement and other federal agencies.

Colonial did not provide any further details and did not provide how long the pipelines would remain closed.

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

During Friday’s trading session, gasoline and diesel cash prices fell on the Gulf Coast.

Both gasoline and diesel futures on the New York Mercantile Exchange rose more than crude oil prices during the day. Gasoline futures rose 0.6% to $ 2.1269 per gallon, while diesel futures rose 1.1% to $ 2.0106 per gallon.

Longer-term price effects depend on how long the lines are closed. If barrels don’t make it onto the lines, prices on the Gulf Coast could fall further while prices in New York Harbor could rise, a market operator said.

Colonial shut down its gasoline and distillate lines significantly during Hurricane Harvey, which hit the Gulf Coast in 2017.

During this time, gasoline prices on the Gulf Coast rose to a five-year high, while diesel prices rose to a four-year high.

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