COLONIAL PIPELINE ATTACK

COLONIAL PIPELINE ATTACK

Subject : International Relations

Context :The Colonial Pipeline on Saturday announced that it has returned its systems to “normal operations” after a cyberattack forced the company to shut down last week, leading to gas shortages in the United States.

Concept :

• The Colonial Pipeline Company, which transports about 45 per cent of all petrol and diesel consumed on the east coast of the US, was forced to shut down operations after a cyberattack.
• The US Federal Bureau of Investigation has confirmed that a criminal gang called Darkside was responsible for compromising the Colonial Pipeline network.
• The shutdown led to the US federal government declaring a regional emergency to allow transportation of fuels through tanker trucks to tide over the impact of shortages.

What is a ransomware attack?

• A ransomware attack is a cyber-attack using malware that encrypts the victim’s files and requires users pay a ransom to decrypt the files.
• The hackers can then threaten to leak the data if the ransom is not paid.
• It takes advantage of human, system, network, and software vulnerabilities to infect the victim’s device.

Impact of cyberattack on oil prices

• The oil prices rose in response to the attack on Colonial Pipeline, with the price of Brent crude rising to $69 per barrel before falling to $67.8.
• The experts noted that a prolonged shutdown of the operations of the pipeline could push up petrol prices in the US as demand peaks during the summer.
• The disruption has already led to an uptick in international refining margins, pushing up the price of auto fuels.
• An increase in the price of petroleum products in Asia could provide a further push to petrol and diesel prices in India, which are already at record high levels.
• The crude oil prices have risen over the past fortnight despite a surge in Covid-19 infections in Asia due to expectations of increasing crude oil demand from the US and Europe.