A recent report by London First and EY has shown that 74% of businesses surveyed has experienced some level of disruption since the Brexit transition period ended in December, of which 72% attributed this to import/export problems.
Colonial Pipeline was hit by a ransomware cyber-attack late last week. The breach of its computer networks forced the company to shut off 5,500 miles of pipeline, stopping the flow of 2.5 million barrels of oil a day which make up 45% of the US East Coast’s fuel supplies.
While work to restore operations is ongoing, it appears it will take some time to resume full operations.
As part of an ‘all-hands-on-deck' effort to prevent fuel shortages, the US government issued emergency legislation on Sunday which relaxes rules on transporting fuel by road.
The emergency declaration allows drivers in 18 states to work extra or more flexible hours when transporting fuel to areas hit by the pipeline outage.
Oil prices threaten to riseSo far prices at the pump have increased slightly, and WTI crude has risen modestly but still remains near $65 a barrel and just shy of a two-month high.
However, analysts warn that if the outage last three days or more, the impact on oil prices could become more pronounced.
Independent oil market analyst Gaurav Sharma told the BBC:
‘Unless they sort it out by Tuesday, they're in big trouble. The first areas to be impacted would be Atlanta and Tennessee, then the domino effect goes up to New York.’
The shutdown comes amidst a decline in US oil inventories, as demand for fuel rises again as more of the economy reopens and there are more cars on the road.
Reports suggest that commodity traders are seeking to divert tankers across the Atlantic to help supply the East Coast, with the possibility of using idle tankers as floating storage in the Gulf of Mexico.
This could help to stifle any fuel price increases in the short-term, but a prolonged shutdown of the Colonial Pipeline is likely to translate into increased prices at the pumps.
In any event, analysts suggest the Colonial Pipeline attack highlights the vulnerability that oil infrastructure faces from hackers and future cyber-attacks could be even more costly.