The real reason why there was a gas shortage this week

This week saw gas lines and shortages reminiscent of the 1973 Arab Oil Embargo across much of the American south. Some law enforcement agencies pulled cops off the streets and many gas stations ran completely out of fuel, with prices soaring in many affected areas.

The shortage was ostensibly caused by the ransomware-fueled shutdown of the 5,000-mile Colonial Pipeline, a piece of critical infrastructure that moves more than half of the East Coast’s fuel from refineries in Houston to distribution points across more than a dozen states.

But was there ever an actual shortage of gasoline? In short, no.

“Unlike the 1970s, when the U.S. experienced long lines for gasoline due to the Middle East embargo, there's ample supply globally,” Fernando Valle, an energy analyst with Bloomberg Intelligence, tells Inverse.

Instead, panic buying of gas far above normal purchasing levels put a temporary strain on the system, which then fueled more panic buying which strained the system more.

It’s a vicious cycle, but one we should be getting out of relatively quickly.

“There's significant inventory waiting to quell rising demand,” says a new report from Bloomberg Intelligence. European refineries are able to ship gasoline to the US via ship if the costs make sense, while regional gasoline inventories were already being increased ahead of the traditional Memorial Day start of summer travel.

“There is typically a seasonal build-up of inventories ahead of the busier summer driving season,” Valle says. “Inventories in the East Coast were relatively high, with over 20 days of typical demand.”

It can normally take 7 to 14 days for refined gasoline products to arrive at the final delivery point depending on location, so even if the pipeline was operating at full capacity, this panic-driven gasoline buying would still cause outages even if the whole system was operating normally.

“If an outage is less than 7 days, there should be enough inventory at hand to quell supply, assuming no panic-buying,” says Valle. Of course, the mere threat of a shortage is enough to send people to the nearest Costco to fill up, bringing to mind the toilet paper shortage of a year ago.

In this case, with the Colonial Pipeline coming back online and ample regional gasoline reserves — there are mainly difficulties keeping gas station tanks full, at this point — any gas shortages should be short-lived.