After pipeline cyberextortion attempt, gasoline ticks higher in SWFL

Gasoline futures are ticking higher Monday following a cyberextortion attempt on a vital U.S. pipeline that carries fuel from the Gulf Coast to the Northeast.

The Colonial Pipeline transports gasoline and other fuel through 10 states between Texas and New Jersey. It delivers roughly 45% of fuel consumed on the East Coast, according to the company.

Colonial Pipeline said Saturday that it had been hit by a ransomware attack and had halted all pipeline operations to deal with the threat. Two people close to the investigation said that the shutdown had been carried out by a criminal gang known as DarkSide that cultivates a Robin Hood image of stealing from corporations and giving a cut to charity.

Futures for crude and fuel, prices that traders pay for contracts for delivery at some point in the future, typically begin to rise each year as the driving season approaches. The price you pay at the gas pump tends to follow.

Victor Claar Ph.D. is an economics professor at Florida Gulf Coast University. He says, “Apparently, we’re vulnerable, right? We didn’t know we were vulnerable to cyber attacks until one happened.”

AAA Autoclub said in a statement: “Florida is not largely dependent on the Colonial Pipeline for gasoline. Most of Florida’s fuel is delivered from Gulf Coast refineries via waterborne vessels. Because of this, Florida should remain well supplied with gasoline, despite the pipeline outage. However, as always, pump prices remain vulnerable to futures price swings, which are influenced by domestic and international supply and demand.”

Claar said the longer it takes for the pipeline to resume normal operations, the we’re more likely to feel the impact, “We’ll probably see higher prices, in part because there’s uncertainty now regarding the availability of the gas.”

He doesn’t expect the impacts to be long-term.