NORTH CAROLINA (BLOOMBERG) – Gas stations along the US East Coast are beginning to run out of fuel as North America’s biggest petroleum pipeline races to recover from a paralysing cyberattack that has kept it shut shut for three days.
From North Carolina to Florida to Alabama, gas stations are reporting that they’ve sold out of fuel as supplies in the region dwindle and panic buying begins to set in.
At least two gas stations in Tallahassee, Florida, were completely out of stock, according to employees who asked not to be named.
In Asheville, North Carolina, Aubrey Clements, a clerk at an Exxon Mobil station answered the phone with “Hello, I’m currently out of gas.”
Colonial Pipeline said it’s manually operating a segment of the pipeline running from North Carolina to Maryland and expects to substantially restore all service by the weekend.
The restart may not come fast enough to avert immediate shortages in the southeast, where North Carolina declared a state of emergency as gas stations reported running of out gasoline.
Stations in Asheville, North Carolina, are out of fuel and lines are forming at outlets that still have supplies. David Marcos, an employee at a Royal Dutch Shell Plc-owner station in the city said they ran out of gasoline and diesel earlier on Monday.
The Marathon gas station in Elizabethtown, North Carolina, had roughly two dozen cars waiting to fuel up, said Chanss Arnett, an employee there.
The stations in town are all packed, Arnett said over the phone, where the door bell chimes from people entering could be heard every other minute.
The conduit has been shut down since late Friday, prompting frenzied moves by traders and retailers to secure alternative supplies.
On Monday, the Federal Bureau of Investigation pointed the finger at a ransomware gang known as DarkSide. The pipeline hasn’t suffered any physical damage and no fuel shortages have been detected, a White House official said.
Colonial Chief Executive Officer Joe Blount and a top lieutenant assured Deputy Energy Secretary David Turk and state-level officials on Monday that the company has complete operational control of the pipeline and won’t restart shipments until the ransomware has been neutralised.
In an 18-minute virtual meeting, Blount said shortages may develop in some markets but said Colonial is working with refiners, marketers and retailers to prevent those, according to a person involved with the meeting who wasn’t authorised to speak publicly about the discussion.
The pipeline serves 90 US military installations and 26 oil refineries, the person said. Meanwhile, President Joe Biden said Russia has “some responsibility” to address the attack.
Emergency shipments of gasoline and diesel from Texas already are on the way to Atlanta and other southeast cities via trucks, and at least two Gulf Coast refineries began trimming output amid expectations that supplies will begin backing up in the nation’s oil-refining nexus.
Airlines flying out of Philadelphia International Airport are burning through jet-fuel reserves and the airport has enough to last “a couple of weeks,’ a spokeswoman said.
Government officials haven’t advised Colonial on whether it ought to pay the ransom, Deputy National Security Adviser for Cyber and Emerging Technologies Anne Neuberger said during a briefing.
New York prices
The national average retail gasoline price rose to US$2.967 (S$3.84) a gallon on Monday, a 2.4 per cent increase from Friday, according to AAA. The premium for wholesale gasoline in the New York area expanded to its widest in three months.
The attack came just as the nation’s energy industry was preparing to meet stronger fuel demand from summer travel. Americans are once again commuting to the office and booking flights after a year in lockdown. Depending on the duration of the disruption, retail prices could spike, further stoking fears of inflation as commodity prices rally worldwide.
DarkSide said in a post on the dark web that it wasn’t to blame and hinted that an affiliate group may have been behind the attack. The group promised to do a better job of screening customers that buy its malware.
Gasoline futures that initially surged as much as 4.2 per cent in overnight trading surrendered most of those gains on Monday.
Convenience-store chains in places like Atlanta and Savannah, Georgia, began clamoring for emergency fuel deliveries on Friday afternoon, said Steve Boyd, senior managing director at Houston-based distributor Sun Coast Resources Inc.
Landlocked cities face the greatest danger of fuel shortages compared with those with access to water-borne deliveries, Boyd said. If the pipeline remains down for many more days, he’s anticipating a “massive surge” in orders.
Sun Coast, which operates about 900 trucks, has delivered emergency supplies during 75 major storms over the past 15 years, including during hurricanes Harvey and Irma in 2017.
Gasoline for June delivery settled little changed at US$2.1334 a gallon in New York. Futures prices have gained more than 50 per cent this year, helped by the recovery from the worst effects of the pandemic.