Oil markets got bearishly excited after the announcement late Tuesday of a cease-fire deal between the United States and Iran. Crude oil prices plummeted by teen-percentage-point amounts in New York and London, turning $110-$115 per-barrel oil into $90-something barrels in a flash. 

But that exuberance is misplaced. Even if the tenuous cease-fire were to hold—something that is very uncertain given the continued firing all across the region, as well as the widely divergent understandings in Washington and Tehran as to what the two sides may be talking about—it will take months for energy markets to regain normalcy. That’s especially true for the refined petroleum products people actually use, but even more so for other energy products, such as liquefied natural gas (LNG), which won’t be back in shape for years.

Oil markets got bearishly excited after the announcement late Tuesday of a cease-fire deal between the United States and Iran. Crude oil prices plummeted by teen-percentage-point amounts in New York and London, turning $110-$115 per-barrel oil into $90-something barrels in a flash. 

But that exuberance is misplaced. Even if the tenuous cease-fire were to hold—something that is very uncertain given the continued firing all across the region, as well as the widely divergent understandings in Washington and Tehran as to what the two sides may be talking about—it will take months for energy markets to regain normalcy. That’s especially true for the refined petroleum products people actually use, but even more so for other energy products, such as liquefied natural gas (LNG), which won’t be back in shape for years.

The simple fact is that all of the production and refining and exports of crude oil, refined products, fertilizer precursors, and petrochemicals that were lost in March and April are gone forever. That means that prices for those things—including diesel (which powers trucks and tractors), jet fuel (used to move tourists and air cargo around the world), and fertilizer (a critical input for food)—will stay elevated well into the second half of this year. And that’s if Tuesday’s shaky peace foundations don’t collapse altogether.

“Our base case is that energy flows start resuming by the end of April, and yesterday doesn’t change anything. It’s not even clear what has been agreed. In any event, two weeks is not going to be enough to lead to a full resumption of flows” through the Strait of Hormuz, said Natalia Losada, a specialist in refined products at Energy Aspects, a London-based energy consultancy.

“All that supply that was lost is not ever going to be produced, and so whether you are in Asia, or in Europe, you are still going to be drawing down inventories, and then need to refill them,” she said. “And as long as inventories are low, markets are going to be vulnerable.”

It’s not just pedestrian things such as the cost of motor fuel or the fuel surcharges that airlines are pocketing. There are human costs to the (ongoing) energy crisis as well. All across Asia, from India and Pakistan to South Korea, the energy shock has led to everything from school closures to curtailed workweeks. Food will remain expensive for vulnerable populations, both in some of those Asian countries as well as in Egypt and Turkey, said Eurasia Group. 

The longer that commodity flows are constrained out of the vital choke point of the Strait of Hormuz, the worse and longer all those impacts will be. And that is precisely problem no. 1: The Strait of Hormuz remains, for all intents and purposes, closed.

It is not clear yet exactly what the United States and Iran have in mind for the future of the world’s most important U-pipe. Iran is under the impression it will continue to administer the waterway, nominally an international strait regulated by the U.N. Convention on the Law of the Sea, as a private toll booth. (The latest plan seems to involve toll payments in cryptocurrency.) U.S. President Donald Trump on Wednesday floated the idea of the United States entering into a joint venture with Iran to operate the strait. Either way, Iran said later Wednesday that it won’t open the gates at all unless Israel stops attacking Lebanon, a condition that Iran and Pakistan say was and that the United States and Israel say was not a part of the cease-fire agreement.

“Iran’s statements are very clear that it expects to retain significant control over Hormuz vessel traffic after the conflict ends. Various comments by President Trump have seemed to endorse that reality, even if the details are not yet clear,” said Richard Bronze, an analyst of energy geopolitics, also at Energy Aspects in London. 

“Diplomats will try to adjust this into something more palatable, such as an international consortium to manage the strait, but there seems to be no going back to the old reality of free passage through the strait with only rhetorical threats from Iranian hard-liners,” he said.

That’s not counting what appeared to be a breach of the cease-fire on Wednesday, when Saudi Arabia’s backup plan, the east-west pipeline, reportedly got hit by drones. That pipe routes oil away from the Strait of Hormuz to export terminals on the Red Sea, which so far has been less threatened than the Persian Gulf. 

A constricted strait chokes off primarily crude oil flows. But it’s the refined products that matter for politicians and the public. 

Beyond the physical damage and shutdowns at some Persian Gulf refineries, there’s less crude oil being exported that extant refiners could process. The upshot is a shortage of consumer products including gasoline, but especially diesel and jet fuel. Asia has felt the pinch since nearly the start of the war; Europe drew down its savings, but is about to feel the hurt—even if the cease-fire holds. The Oxford Institute for Energy Studies this week detailed all the ways in which diminished European refining capacity, combined with reduced imports of refined products from the Middle East and elsewhere, spell trouble for a continent that was already downcast about economic growth.

“Looking at Europe, we are at a pain point,” said Losada. No matter what happens with the purported cease-fire, European countries will be forced to continue drawing down commercial inventories of products to fill the gap left by the non-arriving tankers. “All that is going to need to be refilled, and if anything, that means more demand” and sustained high prices in the second half of the year, she said.

And then there is the actual producing-oil part of the business, which will not snap back any time soon. Persian Gulf oil producers, starting with Iraq, began shutting down oil production very early in the war, because if you can’t move the product, you cannot keep making more of it. Different countries in the region shut down to different degrees, but the important thing is that restarting production takes at least several weeks if not months, as Wood Mackenzie, the big oil and gas consultancy, noted in a report on Wednesday. The time frame to return to prior production levels for Iraq is six to nine months; other producers such as Kuwait may vary, but the unwinding will be long.

All that is true for oil and petroleum product markets is also true for natural gas markets, only a bit more so. Qatar, the second-largest LNG exporter in the world, is still going to require weeks or months to get its natural gas production online. Then it will just be a few weeks more, if the ships actually can get through, until they reach markets. But the 6 percent or so of global LNG capacity that Iran blew up in Qatar’s big facility will be out of commission for a few more years yet.

In other words, the champagne corks in energy markets may have popped prematurely. The world has months of this yet to deal with—if all goes well with the cease-fire—which will harm people on every continent in nearly every part of their day. And that is the best-case scenario.