On Friday, May 7th, Colonial Pipeline became victim to a cyber-attack ransomware causing a major shutdown in their supply chain of oil to the eastern part of the United States. According to AAA, this pipeline delivers approximately 45% of fuel to the East Coast and has caused gasoline prices to increase six cents within the first three days of the shutdown. This come after AAA announced on May 6th a National Average Jump in gasoline demand ahead of the Memorial Day where ten states had already seeing an increase in gas prices. According to GasBuddy, the national average of price of gasoline hit $3.00 per gallon, the first time since 2014.
With little information regarding the status of this shut down, there is no telling what the exact ramification will be; however, depending on how long this shut down will occur there can be substantial impact to the supply of oil and gasoline. Already there are several gas stations that are experiencing a spike in gas prices and gasoline shortages. Camila Domonoske, from NPR reports, “Many gas stations in the Southeast are seeing long lines of drivers eager to fill their tanks and their jerry cans. In some cases, they’re getting turned away because the gas stations have simply run out.” In an article in the Pasadena-Star it states, “More than 1,000 gas stations in the Southeast reported running out of fuel, primarily because of what analysts say is unwarranted panic-buying among drivers” (Bussewitz, Amy, Calvan, 2021).
Until more information makes clear of the situation, analysts are preparing for gasoline shortages, increase oil inventory, drop in oil prices and continued increase in gasoline prices.
Source: Bussewitz, C., Amy J., Calvan, B.C. (2021, May 12). Southeast stations report gas shortages. Pasadena-Star News, A13