Gas Is the New Toilet Paper

If you’re anywhere in the mid-Atlantic or Southeastern United States, you may have seen long lines backed up into the streets at your local gas station. 

The actions of a group of hackers, climbing gas prices, and, let’s face it, a little media hype, had plenty of people scrambling for gas pumps for fear that they wouldn’t be able to fuel their cars over the coming days. 

It’s an old story that’s repeated itself time and again. 

Just over a year ago, you couldn’t find toilet paper or hand sanitizer because people panicked and cleared the shelves. 

When Barack Obama was elected in 2008, there was a run on ammunition because people thought the new president was going to take their weapons. A similar situation is playing out now under Biden.

In the hours and days following the 9/11 attacks, oil and gold prices soared as the world anticipated America’s response to the terrorist attacks. 

These are just a few of the recent examples, but irrational fear that leads to this kind of behavior has been around forever. 

Colonial Pipeline, the company that was targeted by hackers and had its operations disrupted, is already back to operating normally and gas supplies will be back to normal within days. 

But this whole short-lived episode just goes to show how quickly mass panic can spread and the effect it can have on the markets. 

Beyond that, however, it highlights an issue that comes up often but seems to fall out of the public eye shortly after. 

It shows just how vulnerable key infrastructure in the U.S. is. 

The group behind the attack, a Russia-based organization called DarkSide, disabled the pipeline with a ransomware attack. With ransomware, critical data is stolen and the hackers demand money to return it. 

The data that the hackers accessed had to do with the company’s business operations rather than logistics. So at no point would they have been able to affect the flow or transport of fuel. 

DarkSide has claimed responsibility and has said it’s only interested in money. Officially, the group has no ties to the Kremlin, but it seems that the group’s actions are tolerated by Vladimir Putin’s government because they only act against foreign targets. 

But even if money is the group’s lone goal, it’s hardly the only group out there carrying out attacks against different nations’ critical infrastructure. 

The Biden administration knows this. The president recently signed an executive order aiming to improve the country’s cybersecurity while also using this attack to make the case for the $2 trillion infrastructure package that he wants to get passed. 

And it makes sense now that infrastructure is a national security issue. 

The fuel from Colonial Pipeline doesn’t just go in our cars. It’s used for jet fuel, home heating oil, and diesel fuel. A massive disruption would do more than just keep people from getting to their jobs. 

And while you have a group like DarkSide targeting fuel pipelines for money, official state actors have aimed for bigger targets and more sinister goals in the past. 

A 2018 article in the New York Times highlights Russia-based cyberattacks against U.S. and European nuclear power plants as well as water and electrical systems. The attackers in these cases signaled the ability to sabotage or shut down plants at will. 

According to officials, these attacks coincided with Russia’s election interference and continued in the years after. It’s a mix of Russia testing the waters and showing its rivals on the world stage just how far its capabilities extend. 

North Korea and China have carried out similar attacks not just against the U.S. but countries throughout Europe and East Asia. These attackers all have ambitions of moving to the top of the world order and it’s clear they plan on displacing current leaders to do it.  

At the same time, the U.S. and countries throughout Europe and East Asia aren’t going to just stand by and let it happen. They know their infrastructure is vulnerable to attack and leadership is coming up with plans to address those weaknesses while also investing in their own futures. 

As those plans are developed and brought into existence, investment opportunities are sure to follow, especially as it relates to the grid.

Keep your eyes open,

Ryan Stancil
Editor, Daily Profit Cycle

Ryan Stancil is an editor and regular contributor to Daily Profit Cycle. He’s been active in the financial publishing industry for more than half a decade, offering insights and commentary on technology and geopolitics to help readers make sense of the constantly changing landscape and how it affects their investments. His readers appreciate his "tell it as it is" writing style, where he always offers a fresh new perspective on what's happening in the market and leaves nothing unsaid.