Colonial Pipeline Hackers Stole Data on Thursday, Ahead Of Shutdown: Bloomberg

Investigators are looking at a group of hackers called DarkSide, who seem to be behind the cyberattack on Colonial Pipeline, which temporarily halted its pipeline operations on Friday.

What Happened: The cyberattack that led to the shutdown began on Thursday. The attackers stole a large amount of data from Colonial Pipeline before locking computers with ransomware and demanding payment, Bloomberg reports, citing people familiar with the matter.

Ransomware is a type of malware designed to lock down systems by encrypting data, with the attackers then demanding payment to regain access.

According to the investigators, the hackers took nearly 100 gigabytes of data from the Alpharetta, a Georgia-based company's network in two hours on Thursday. 

Bloomberg quoted people familiar with the investigation saying that the move was part of a double-extortion scheme. Besides threatening to keep the company’s information locked, hackers also threatened to leak the data to the internet unless they are paid a ransom.

Colonial Pipeline took specific systems offline on Friday and temporarily halted all pipeline operations after learning about the cyberattack. 

Colonial would not say when it plans to reopen the pipeline, Reuters reported today. 

On Saturday, U.S. President Joe Biden was briefed on the incident, a White House spokesperson said, adding that the government is helping the company restore operations and prevent supply disruptions.

The Department of Energy said it is monitoring potential impacts to the nation's energy supply. 

"A shutdown lasting four or five days, for example, could lead to sporadic outages at fuel terminals along the U.S. East Coast that depend on the pipeline for deliveries," Reuters quoted Andrew Lipow, president of consultancy Lipow Oil Associates, as saying.

Why It Matters: Colonial Pipeline is the biggest gasoline pipeline in the U.S., and the disruption could affect gasoline and diesel fuel supplies.

The company's pipeline transports 2.5 million barrels each day, taking refined gasoline, diesel fuel and jet fuel from the Gulf Coast up to New York Harbor through 5,500 miles of pipelines.

The shutdown is already hinting towards a spike in gasoline and diesel prices ahead of Memorial Day and the summer driving season. Bloomberg reports that U.S. gasoline prices may surge to their highest since 2014. The price of gasoline hit a $3 average in October 2014. On Friday, the national average stood at $2.96 a gallon.

Colonial Pipeline is a private company owned by CDPQ Colonial Partners, LP; IFM (US) Colonial Pipeline 2, LLC; KKR-Keats Pipeline Investors, LP; Koch Capital Investments Company, LLC; and Shell Midstream Operating, LLC, according to the company's website.

Publicly traded parent companies in that mix include private equity giant KKR & Co KKR and Royal Dutch Shell Plc RYDAF

Learn more about energy stocks and ETFs: Don't Miss These Energy Stocks In 2021.

Image by LoggaWiggler from Pixabay.