U.S. oil pipeline was "black" or brought ripple effects

Original source: Economic Information Daily

Due to a ransomware attack, Colonel Pipeline Transportation Company, a large US oil product pipeline operator, was forced to close the 5,500-mile transportation pipeline that was responsible for nearly 45% of the fuel supply on the east coast of the United States.

Affected pipelines may resume operations this week

Colonel Pipeline Transportation Company issued a statement on the 10th that the company is formulating a plan to resume the operation of fuel transportation pipelines that were forced to close due to cyber attacks in a step-by-step manner under the premise of ensuring safety.

The statement said that the company is continuing to invest huge resources to quickly and safely resume the operation of the pipeline.

US President Biden said on the 10th that the Federal Government’s Department of Energy is taking measures to help the Colonial Pipeline Transportation Company restore its forced-closed energy supply network and investigate cyber attacks.

According to BBC reports, the Georgia-based Colonial Pipeline Transport Company announced on the 8th that the company learned that it had been attacked by ransomware and closed its four main product pipelines on the 7th.

The ransomware attack was launched by a cybercriminal group called "DarkSide".

At present, Colonial Pipeline Transportation Company has not disclosed whether it has paid the ransom.

The Federal Motor Vehicle Transportation Safety Administration under the U.

Disturb fuel-dependent industries

According to the website of Colonial Pipeline Transportation Company, the company’s main business is to transport refined oil from Texas to the eastern and southern markets through pipelines.

According to the report, the Colonial Pipeline Transportation Company’s refined energy transmission system is huge.

In this regard, Jaffe, a research professor and general manager of the US Climate Policy Laboratory, commented that this is not only an oil pipeline, but also a "main artery" of US infrastructure.

According to independent oil market analyst Shamar, a large amount of fuel has been stranded at the refinery in Texas.

Bloomberg said that from the perspective of impact, if the Colonial Pipeline Transportation Company's pipeline is closed for a long time, it may make the Northwestern United States more dependent on tanker supplies.

Increased uncertainty in oil price trends

Affected by the news of the closure of the refined oil pipeline, international oil prices once intensified volatility.

    In the early Asian market on Monday, US gasoline futures rose by more than 4%, but then fell back and fell below US$65 per barrel in intraday trading on the 11th, while the price of Brent crude oil futures fell below US$68.

    At present, US fuel inventories are declining; at the same time, as the US economy gradually recovers, consumer demand for travel is increasing, and the demand for fuel, especially gasoline, is gradually rising, and the shortage of supply naturally leads to rising oil prices.

    The analysis pointed out that in the current US economic recovery expectations and the arrival of the summer travel season, once the pipeline is paralyzed for too long, the US oil price will rise or exceed $3 per gallon.
This will be the first time since October 2014.
The impact of supply fluctuations on market prices may be amplified.
With the rise in global commodity prices, which has accelerated the increase in inflation, this has further aggravated concerns about inflation.

    The closure of oil pipelines is likely to have a ripple effect on the refined oil and transportation markets, depending on when the pipeline resumes operations.
If the pipeline resumes operations on the 14th, there will be no major problems in the market.
If the pipeline is closed for two weeks, oil prices are likely to rise, some gas stations will have insufficient supply, and panic buying will only make the situation worse.

    Elni Bassamian, CEO of U.
S.
commodity storage brokerage and consultant "Tank Tiger", believes that most of the oil terminal's oil inventory can meet the demand for 10 to 15 days, so the impact of the pipeline closure event It should not be as serious as some people worry about.

    As many major global economies gradually emerge from the shadow of the new crown pneumonia epidemic, demand for oil, wood and steel has soared, and commodity prices have generally soared.
The rise in fuel prices will trigger more global concerns about inflation in the United States.
"Everything depends on the duration of the paralysis," said Stanovo, a commodity analyst at UBS.
If the pipeline closure lasts long enough, it will support rising prices, and the East Coast of the United States will have to import more from outside the United States.
Of petroleum products.