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US fuel pipeline operator Colonial Pipeline shuts its entire network after cyber attack

May 12/2021

MOSCOW (MRC) -- Top US fuel pipeline operator Colonial Pipeline shut its entire network, the source of nearly half of the US East Coast's fuel supply, after a cyber attack that industry sources said was caused by ransomware, reported Reuters.

The company transports 2.5 million barrels per day of gasoline, diesel, jet fuel and other refined products through 5,500 miles (8,850 km) of pipelines linking refiners on the Gulf Coast to the eastern and southern United States.

Colonial shut down systems to contain the threat after learning of the attack on Friday, it said in a statement.

That action has temporarily halted operations and affected some of its IT systems, the company said.

While the US government investigation is in its early stages, one former US government official and two industry sources said the hackers are most likely a highly professional cybercriminal group. Investigators are looking into whether a group dubbed "DarkSide" by the cybersecurity research community is responsible, the former government official said.

Colonial has engaged a third-party cybersecurity firm to launch an investigation and contacted law enforcement and other federal agencies, it said. Cybersecurity company FireEye has been brought in to respond to the attack, the cybersecurity industry sources said. FireEye declined to comment when asked if it was working on the incident.

The US Transportation Security Administration told Reuters it is working with other agencies on the situation.

During the trading session on Friday, gasoline futures on the New York Mercantile Exchange gained 0.6% to settle at USD2.1269 a gallon, while diesel futures rose 1.1% to settle at USD2.0106 a gallon - both outpacing gains in crude oil. Gulf Coast cash prices for gasoline and diesel, meanwhile, edged lower on prospects that supplies could accumulate in the region.

"As every day goes by, it becomes a greater and greater impact on Gulf Coast oil refining," said Andrew Lipow, president of consultancy Lipow Oil Associates. "Refiners would have to react by reducing crude processing because they've lost part of the distribution system."

If the system is shut for four or five days, the market could see sporadic outages at fuel terminals that depend on the pipeline for deliveries, he said. Gulf Coast prices could weaken further, while prices in New York Harbor could rise, one market participant said - gains that could portend increases at the Northeast pumps.

As MRC informed previously, on 7 October, 2020, Braskem informed its shareholders and the market that, in view of an identified cyber-attack occurred in its Information Technology environment, the protection system interrupted, as a precautionary measure, the access to some of its servers and software, impacting its operations. And in a couple of weeks after the cyber-attack that led the company to declare force majeure in Brazil, Braskem notified that its systems were back online and restored normal operations.

Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 576,270 tonnes in the first three month of 2021, up by 4% year on year. Low density polyethylene (LDPE) and high density polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market totalled 410,890 tonnes in January-March 2021, up by 56% year on year. Supply of homopolymer PP and PP block copolymers increased.
Author:Margaret Volkova
Tags:PP, PE, crude and gaz condensate, PP block copolymer, homopolymer PP, propylene, LDPE, HDPE, ethylene, petrochemistry, Braskem, Brazil, Russia, USA.
Category:General News
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