- Colonial Pipeline was forced to shut down the largest US oil pipeline after a cyberattack.
- It is unknown when the pipeline will reopen, but it is already pushing gas prices higher.
- Fuel prices are likely to hit $3 per gallon ahead of Memorial Day travel.
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US fuel prices are likely to hit their highest level in seven years after hackers shut down the largest oil pipeline in the US.
Before the pipeline hack, average gas prices in the US clocked in at $2.96 per gallon on Friday. Prices were not expected to see another significant spike until after Memorial Day, when travel is expected to push demand even higher at the end of the month, but the oil pipeline hack has already bumped prices up as much as 4.2% on Monday morning.
The 8,851km pipeline was shut down on Saturday after its operator, Colonial Pipeline, became the victim of a cyberattack. The incident involved ransomware, but the company did not give out further details or say when they would reopen the pipeline, which carries almost half of the East Coast’s fuel supply.
The cyberattack could spell major trouble for US gas prices, according to analysts.
“A prolonged shutdown (5 days or longer) is likely to send gasoline prices higher, which already trade close to a 7-year high,” UBS Global Wealth Management wrote in a note.
Gas prices have been skyrocketing in recent months as demand outstrips dwindling fuel supplies. In April, fuel prices leaped 9% in their largest one-month increase in 9 years as shipping container shortages, port delays, and OPEC production cuts made the commodity increasingly valuable.
If gas prices hit $3 per gallon – their highest price since October 2014 – ahead of Memorial Day, it will be one of many price spikes US consumers will face. Price tags for other holiday goods from hot dogs and bacon to vacation homes and chlorine will make the holiday an increasingly expensive endeavor.