Largest U.S. distributor shut down:
The company that was targeted by this cyber attack is Colonial Pipeline. It is the largest fuel distributor in the United States. This company was thus obliged to stop all its operations since Friday following a cyber attack of which it was victim. This is in any case what the company which is in charge of transporting gasoline and diesel on more than 8,800 km of pipelines across the country said in a press release.
Let us note moreover that this cyber attack is also the most serious that we know to date as regards an infrastructure on the American soil. This is undoubtedly the reason why this news had an immediate effect on the market with a rise in crude oil prices at the beginning of the week.
Why is this shutdown causing a drop in Crude Oil prices?
It is of course not without reason that investors have reacted strongly to this cyber attack this week. Indeed, the Colonial Pipeline company is currently in charge of transporting more than 380 million liters of fuel to the northeastern United States every day. It is also in charge of the distribution of nearly 45% of the fuel consumed on the East Coast of the country.
Thus, the fact that the company had to stop its activities on Friday caused a real panic regarding the supply of fuel in the country, which also led to a rise in the price of crude oil for fear of a shortage.
On the market, we could thus observe yesterday at the beginning of the afternoon that the barrel of oil Brent of the North Sea for delivery in July quoted 69.02 dollars on the market of London, that is to say a rise of 1.08% compared to its closing of Friday.
As for the barrel of West Texas Intermediate in the United States and for delivery in June, it progressed as for him of 1.05% with a quotation in 65.58 dollars.
The other elements in cause in this rise of the prices of the crude oil:
According to the analysts specialized in the oil market, the rise in the prices of this beginning of week is to be allotted at the same time to this cyber attack and with good prospects of recovery of the world demand.
When asked about this, the company said it would reopen only part of its distribution lines between terminals without giving a precise date for a full reopening.