East Coast: Run on US gas stations has begun

Following the failure at the beginning of the week to restart the Colonial Pipeline, the main supply artery for energy deliveries from the Gulf of Mexico to the states on the northeast, east and southeast coasts of the USA, which had been hoped for by everyone, concern is growing among residents of the states concerned about gasoline shortages and supply shortages. The result?

It hasn’t taken long since then for concerns and fears among much of the population of the states most affected by the energy shutdown to turn into a run on local gas stations.

The Colonial Pipeline, which transports refined energy products such as aviation kerosene, gasoline and diesel from refineries on the Gulf of Mexico to states in the northeastern, eastern and southeastern United States, remains idle.

The result is that a looming energy supply crunch seems to be brewing among more and more residents in the affected states. As a result, search queries for keywords such as “gasoline shortage” on the Google search engine have literally exploded since noon yesterday.

And indeed, yesterday saw the appearance of the first reports of local gasoline and diesel shortages in various local media. Naturally, in the face of a spreading panic, reports of this kind made the rounds on social networks.

The result was not long in coming, as in some places long lines formed in front of gas stations, whose operators sometimes announced by means of notices that they no longer had sufficient stocks of gasoline or diesel. When pictures of this kind then circulated on social networks, the lines in front of local gas stations began to grow even longer.

Supply shortages of gasoline and diesel in the United States are currently said to occur mainly in the southeast of the country. According to the chairman of the board of the Colonial Pipeline operating company, Joseph Blount, his company has taken all possible measures to get the pipeline supply back on track.

Currently, he said, work is being done feverishly to resume pipeline transportation of gasoline and diesel as soon as possible. However, transportation systems would not be restarted until there has been a full-scale removal of the ransomware installed on the Formen-owned computers, according to the report, citing a Bloomberg report.

So far, the increase in gasoline prices has remained relatively manageable. Nationwide, a gallon of gasoline cost about six U.S. cents more yesterday to climb to just under three U.S. dollars in light of the ongoing pipeline outage. However, nationwide gasoline prices have thus reached almost the highest level since 2014.

It should be noted at this point that about 45 percent of gasoline and diesel demand on the U.S. East Coast is satisfied by means of shipments via the Colonial Pipeline. For this reason, the analysis company AAA is not particularly optimistic about the current situation, but warns that gasoline and diesel prices could face a sharp increase.

The temporary outage of the Colonial Pipeline would have a negative impact on both the supply situation and the price development in the gas, gasoline and diesel sectors. Different regions of the country would be affected in different ways, so that in some cases there could be significant price differences in relation to other regions of the country.

Gasoline shortages could occur in the current week, citing AAA, particularly in the states of Mississippi, Tennessee, Georgia, North Carolina, and Delaware, all the way up to the nation’s capital, Washington, D.C.

This assumption is beginning to be confirmed in some places, such as here in the state of Tennessee, which only fuels fears among social media users. It cannot be ruled out that this could be just the beginning. The longer the Colonial Pipeline transportation disruption continues, the more the likelihood grows that there could be a drastically worsening panic run on local gas stations….

DepthTrade Outlook

Does anything need to be elaborated or added on this? Or do the pictures alone not speak for themselves? It’s also not as if I haven’t already elaborated enough on such a threatening situation over the last few years. Ransom attacks become more and more a threat for the economy, the cyber security business should grow.

Christian Zürcher Send an email

From 1990 to 2005, Mr. Zürcher was a risk analyst in the institutional swiss banking sector - thereafter, he specialized exclusively in private trading of financial products. He is a certified real estate agent and studied economics. For more than thirty-five years, Mr. Zürcher has been intensively involved in the observation of financial markets, globalization, and the monetary system. Mr. Zürcher enjoys an excellent reputation as a political analyst and commentator related to finance.
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