The Colonial Pipeline Co. said Saturday that it has returned its service to normal operations.
What Happened: The Colonial Pipeline Co. announced on Twitter that it had returned to normal operations days after it restarted its pipeline following last week's ransomware attack.
Gasoline shortages along the U.S. East Coast have begun to ease slightly as the company starts delivering "millions of gallons per hour," and ships and trucks have been deployed to fill up dry storage tanks.
The company had halted all pipeline operations after learning about the cyberattack. The six-day pipeline shutdown triggered widespread panic-buying by U.S. motorists that left filling stations across the U.S. Southeast out of gas.
According to GasBuddy, 80% of gas stations in Washington, D.C. were without fuel on Saturday afternoon, an improvement from 88% late Friday. Also, more than 13,400 gas stations surveyed in the east and south were experiencing outages on Saturday, down from 16,200 early on Friday.
Ships deployed under emergency waivers were moving fuel from U.S. Gulf Coast refiners to the northeast. Also, 18-wheel tanker trunks were ferrying gasoline from Alabama to Virginia, helping to ease the shortages.
On Friday, The Wall Street Journal reported that the hacker group named DarkSide, which took responsibility for the pipeline ransomware attack, said it planned to disband following pressure from the U.S. and investigations by law enforcement agencies.
Last week, Colonial Pipeline Co. reportedly paid nearly $5 million in untraceable cryptocurrency to bring an end to to the ransomware disruption.
Why It Matters: The pipeline outage accelerated increases in gasoline prices that were "already rising due to higher crude prices and demand ahead of Memorial Day," Reuters quoted AAA spokeswoman Ellen Edmonds as saying.
However, as of today, U.S. gasoline demand has dropped 12.6% from the previous week, probably as panic-buying eases up.
U.S. crude prices could edge higher as refiners process more oil to catch up from gasoline storage that was drawn down while the pipeline was shuttered.
Colonial Pipeline is the biggest gasoline pipeline in the U.S. The company's pipeline transports 2.5 million barrels each day, taking refined gasoline, diesel fuel and jet fuel from the Gulf Coast up to New York Harbor through 5,500 miles of pipelines.
Colonial Pipeline is a private company owned by CDPQ Colonial Partners, LP; IFM (U.S.) Colonial Pipeline 2, LLC; KKR-Keats Pipeline Investors, L.P.; Koch Capital Investments Company, LLC; and Shell Midstream Operating, LLC.
Publicly traded parent companies involved in that ownership structure include private equity giant KKR & Co KKR and Royal Dutch Shell Plc RYDAF.
Image: Marathon Petroleum
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