A car is filled with gasoline at a gas station pump in Carlsbad, California August 4, 2015. REUTERS/Mike Blake
A car is filled with gasoline at a gas station pump in California.
Thomson Reuters
  • Gasoline futures jumped to their highest in over two years after hackers attacked the largest fuel pipeline operator in the US.
  • Colonial said Sunday evening that four of its main pipelines were still down but smaller lines had been restored.
  • Gasoline futures climbed just weeks before the US summer driving season begins.
  • See more stories on Insider's business page.

Gas futures hit their highest level since May 2018 on Monday as a cyberattack against the largest fuel pipeline in the US kept key operations offline for a third day and just weeks before demand for gas should spike for the summer season.

The US government on Sunday declared a regional emergency covering 17 states and the District of Colombia, a move aimed at helping fuel delivery in the wake of Friday's cyberattack against Colonial Pipeline, the country's largest refined fuel pipeline operator. The attack forced the company to temporarily stop operations "to contain the threat" along its 5,500 miles of pipeline.

The price of gas futures climbed as much as 4.2% to $2.22 per gallon on Monday, the highest since May 2018. The gain was later reduced to 1.5% to $2.1583 per gallon. Meanwhile, West Texas Intermediate oil futures rose 0.9% to $65.37 per barrel on Monday.

"With the capacity to transport 2.5 million barrels of gasoline and other oil products per day, the affected pipelines supply almost half of the fuel needed on the US East Coast," Commerzbank commodities analyst Carsten Fritsch said in a note Monday.

The average price of retail gasoline was $2.967 per gallon on Monday, according to the AAA automobile association, saying that prices had risen last week with the summer driving season ahead.

Colonial, based in Alpharetta, Georgia, said in an update Sunday that four of its mainlines remained offline but some smaller lateral lines between terminals and delivery points were operational.

Colonial said it learned on May 7 "it was the victim of a cybersecurity attack and has since determined that the incident involved ransomware."

Various media reports have said a cybercrime group originating in Russia called DarkSide is behind the attack. Bloomberg reported that the hackers stole nearly 100 gigabytes of data out of Colonial's network in two hours on Thursday, with the report citing two people involved in Colonial's investigation.

"If the pipelines were to remain out of action for any length of time, this would have far-reaching effects on the oil market not only in the US, but also in Europe," Fritsch at Commerzbank noted. He added that the attack took place soon before gasoline demand should ramp with the start of the US summer driving season on Memorial Day at the end of May.

"We are in the process of restoring service to other laterals and will bring our full system back online only when we believe it is safe to do so, and in full compliance with the approval of all federal regulations," said Colonial in its Sunday evening statement.

If the disruption to the pipelines is resolved "in a matter of days," then the impact should be limited, said Commerzbank.

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