Oil rises 1% after cyber attack forces closure of U.S. fuel 'jugular' pipeline

By Aaron Sheldrick and Simon Webb
TOKYO, May 10 (Reuters) - Crude prices climbed more than 1%
on Monday after a major cyber attack that forced the shutdown of
critical fuel supply pipelines in the United States,
highlighting the fragility of oil infrastructure.
Brent crude LCOc1 was up by 76 cents, or 1.1%, at $$69.04
a barrel by 0039 GMT, having risen by l.5% last week. U.S. West
Texas Intermediate futures CLc1 rose by 70 cents, or 1.1%, at
$65.60 a barrel, after gaining more than 2% last week.
Signalling the seriousness of the situation, the White House
was working closely with Colonial Pipeline to help it recover
from the ransomware attack, which forced the biggest U.S. fuel
pipeline operator to shut a network supplying populous eastern
states. Colonial's network is the source of nearly half of the U.S.
East Coast's fuel supply, transporting 2.5 million barrels per
day of gasoline and other fuels, and the company had to shut all
its pipelines after the cyber attack on Friday, which involved
ransomware. It was not clear who carried out the attack, but sources
told Reuters the hackers were likely a professional
cybercriminal group.
Colonial said on Sunday its main fuel lines remain offline
but some smaller lines between terminals and delivery points are
now operational. It didn't say when the network might return to
full operational capacity.
"The major takeaway is the bad guys are very adept at
finding new ways to penetrate infrastructure," Andrew Lipow,
president of Lipow Oil Associates told Reuters. "Infrastructure
has not developed defences that can offset all the different
ways that malware can infect one's system."
A prolonged shutdown of the line, described as the "jugular
of infrastructure" in the United States by one analyst, would
cause prices to spike at gasoline pumps ahead of peak summer
driving season, a potential blow to U.S. consumers and the
economy.
U.S. gasoline prices RBc1 jumped nearly 2%, while heating
oil was up by more than 1%.
The attack has prompted calls from American lawmakers to
strengthen protections for critical U.S. energy infrastructure
from hacking attacks. The Department of Energy said it was monitoring potential
impacts to the nation's energy supply, while the U.S.
Cybersecurity and Infrastructure Security Agency and the
Transportation Security Administration told Reuters they were
working on the situation.