Oil Prices Tumble over Ransomware Attack on U.S Refineries

Oil Prices Tumble over Ransomware Attack on U.S Refineries

Oil prices plunge on Tuesday over low global demand for crude as the United States (U.S) refineries battle ransomware attacks on facilities.

The cyber-attack forced a key U.S refined products pipeline system, the Colonial pipeline, to temporarily shut down its network, forcing down oil demand.

Consequently, international benchmark Brent crude dropped to $67.81 per barrel, losing 0.74% from a closing price of $68.32 a barrel on Monday.

Also, the American benchmark West Texas Intermediate (WTI) settled at $64.43 per barrel at the same time after it sheds 1.82% from $65.63 a barrel.

The US’s largest pipeline that carries 2.5 million barrels a day of diesel, gasoline, and jet fuel got hit by a cyber-attack.

Ransomware hackers broke into some of its networks on Friday, demand was curbed due to disrupted refinery production in the region.

The production decrease in some refineries that are fed from the Georgia-headquartered pipeline also forced supplier firms in the area to reduce output.

Then, French oil giant Total announced a 225,500-barrel reduction in gasoline production at the Port Arthur refinery due to the pipeline outage.

Also, the largest oil refinery in the US, Motiva in Port Arthur, Texas, which processes over 600,000 barrels of oil per day, halted operations due to the attack.

The pipeline company’s website is currently offline although it is expected to “substantially” restore operational service by the end of the week.

Without directly mentioning the Colonial Pipeline, a group calling itself Darkside, a Russian cybercrime gang, released a statement Monday saying its goal with the attack was to “make money, and not create problems for society.”

In his remarks at the White House on Monday, US President Joe Biden declared there is no evidence that Russia is responsible for the attack, but said it has “some responsibility to deal with this.”

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The US government also issued emergency legislation on Sunday and a total of 18 states have been granted a temporary hour of service waiver to transport gasoline, diesel, jet fuel, and other refined petroleum products by road.

Oil Prices Tumble over Ransomware Attack on U.S Refineries