US fuel prices are on the way to their highest level in seven years after hackers shut down the largest oil pipeline in the US.

This is happening at a time that people frustrated by the lockdown were hoping for their first possible holiday travel in over a year.

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Before the pipeline hack, average gas prices in the US were about $2.96 per gallon. Prices were not expected to see another significant spike until after Memorial Day, but the oil pipeline hack already bumped prices up as much as 4.2% on Monday.

The 5,500-mile pipeline was shut down on Saturday after its operator, Colonial Pipeline, became the victim of a cyberattack. The incident  was said to involve ransomware.

The cyberattack could spell major trouble for US gas prices, according to analysts.

"A prolonged shutdown (5 days or longer) is likely to send gasoline prices higher, which already trade close to a 7-year high," UBS Global Wealth Management wrote in a note.

Colonial Pipeline did issue a statement Wednesday saying that it had initiated the restart of pipeline operations as of 5 p.m. ET.

The company warned that it will take several days for the supply chain to return to normal.

“Some markets served by Colonial Pipeline may experience, or continue to experience, intermittent service interruptions during the start-up period,” the statement read. “Colonial will move as much gasoline, diesel, and jet fuel as is safely possible and will continue to do so until markets return to normal.”

Colonial Pipeline delivers about 45% of the East Coast’s gas. The pipeline runs from the Gulf Coast to the New York metropolitan region.

Panic-buyers flooded gas stations on the East Coast prompting states such as North Carolina and Virginia to issue states of emergency.

Georgians were also getting squeezed, with 43% of stations there out of gas, according to Gasbuddy.com. In Virginia, 44% of stations were out, and in South Carolina, 16% had no fuel.

“What you’re feeling is not a lack of supply or a supply issue. What we have is a transportation issue,” said Jeanette McGee, spokeswoman for the AAA auto club. “There is ample supply to fuel the United States for the summer, but what we’re having an issue with is getting it to those gas stations because the pipeline is down.”

There’s a national trucker shortage, so the industry isn’t able to put more trucks on the road.

If gas prices hit $3 per gallon — their highest price since October 2014 — ahead of Memorial Day, it will be one of many price spikes US consumers will facePrice tags for other holiday goods from hot dogs and bacon to vacation homes and chlorine will make the holiday an increasingly expensive endeavor.

(Business Insider)

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