Power has now been restored to much of Argentina and Uruguay following an unexplained failure in the electrical interconnection system of both countries. This unprecedented power outage affecting Argentina and Uruguay left tens of millions of people in Argentina and Uruguay in darkness for several hours on Sunday.
The blackout is reported to have occurred shortly after 7:00 am local time on Sunday 16 June 2019 in Argentina, cutting power to the entire country. Local newspapers and social media captured images of towns and cities without power, with long lines of cars queuing at petrol stations. The outage has been reported as the biggest blackout in recent history across Latin America.
Argentinian President Mauricio Macri said in a series of comments on Twitter: "This is an unprecedented case that will be thoroughly investigated". Argentina's energy secretary, Gustavo Lopetegui, has also said that the Government does not believe a cyber-attack caused a massive power outage, although "At this moment we do not rule out any possibilities but...a cyberattack is not within the preliminary alternatives being considered".
Whilst the losses have not been attributed to a cyber-attack, social media commentators were quick to notice the coincidental timing with a New York Times article, published hours earlier, noting the United States' previously unreported deployment of computer code inside Russia's power grid (here).
As of now, no explanation for the outage has been identified and the authorities continue to conduct investigations into the cause. In the meantime, widespread economic impact is feared in both Argentina and Uruguay, potentially affecting critical sectors of the economy. Argentina is home to the Vaca Muerta shale formation, one of the world's largest reserves of shale gas and oil, and it is unclear how the outage might have impacted its operations. In addition, one of Argentina's biggest water companies, Agua and Saneamiento Argentinos, has issued an alert to the effect that the distribution of drinking water might have been affected by the outage.
The direct impact on the economy, and the insurance industry remains unknown, but it seems likely that insurance loses will be generated by the blackout, and across many lines of business. Again, whilst these losses have not been attributed to a cyber-attack, the possible insurance implications of such an attack bear a striking similarity to those set out in Lloyd's 2015 Business Blackout Emerging Risk Report here.
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