Would-be investors are being warned to resist the temporary “sugar rush” of high oil and gas prices brought on by Donald Trump’s war on Iran, after Trump delayed his 48-hour ultimatum for Iran to reopen the Strait of Hormuz and industry executives predicted a long, slow recovery for fossil fuel markets.

The “sugar rush” caution coincided with a suggestion that Canadian fossil companies could reap a C$90-billion financial windfall if the war drives oil prices high enough for long enough to trigger a new wave of climate-busting oil and gas development.

But even if the war disrupts global energy markets for many months or a couple of years, it still won’t be enough to justify new investments in multi-billion-dollar fossil industry infrastructure that would take a decade or two to pay off, analysts say—especially if the price spikes brought on by the war push energy-importing countries into a faster transition off fossil fuels.

On Saturday, the Financial Times reported on modelling by Enverus, a Houston-based analytics firm owned by the Blackstone investment management company, that showed Canadian oil companies receiving up to a $90-billion revenue boost if oil prices driven up by Trump’s war remain high. The previous day, the price of West Texas Intermediate (WTI), the grade of crude oil that is treated as a benchmark for North American markets, stood at US$98 per barrel. That was nearly a 50% increase from Feb. 27, the day before the war began, when WTI was selling for $67.02.

Prices fell again after Trump said he would postpone his threatened attacks on the Iranian power grid.

Enverus calculated that Canadian oil companies would take home C$25 to $30 billion in extra revenue for every $10 increase in oil prices. With recent analysis concluding that foreign owners hold 73% of the shares in Canada’s four biggest oil sands producers, and U.S. owners accounting for 60%, the lion’s share of the profit from that windfall will leave the country.

With Trump claiming he wanted to de-escalate the war while sundowning his Saturday night threat to “obliterate” Iran’s power plants if the Strait of Hormuz wasn’t fully open within 48 hours, Andy (Anil) Hira, a professor of political science at Simon Fraser University, said the war’s shock to global energy markets could be enough to trigger the new investment that Canada’s fossil sector has long craved.

“My feeling is that Trump is posturing and will offramp, but I don’t think anyone knows,” Hira wrote in an email Sunday. “If Trump attacks the power plants and Iran escalates to attack further oil and gas infrastructure, there could be an estimation that such a shock to market supply would warrant this investment.”

But even in that geopolitically extreme case, investors would make that bet at their own peril.

Over the short term, for many producers that don’t export through the Strait of Hormuz, there’s “a lot of money to be made, as supplies are scarce and prices are driven up by the richer countries to keep the energy services they need and want,” Daan Walter, principal with the UK’s Ember clean energy consultancy, told a webinar late last week.

But “I think the wrong conclusion to draw from this is to get high on the sugar rush of immediate cash inflow to your country because of higher export revenues,” since the corresponding higher prices will also prompt importing countries to shift away from fossil fuels.

“The real structural implication over the next decade will be that people will move away faster from these fuels,” he added, so that the global peak in oil demand that the International Energy Agency (IEA) predicted for 2029 will actually come sooner.

“The longer the closure lasts, the higher prices will get, and the closer that peak will move,” Walter said. So it would be a mistake to decide that “there’s a lot money to be made, so let’s invest. That might be true for the duration of this crisis, but soon after, like with any sugar high, there will be a sugar crash that comes afterwards.”

The Times story didn’t indicate how long the price increase would have to persist to deliver the financial boost that Enverus projected. Analysis by The Energy Mix indicates that oil prices would have to remain at $10 per barrel above pre-war levels for nearly 16 months—472 days—for the windfall to exceed $25 billion. To reach $90 billion, prices would have to be $40 per barrel higher for about 425 days, or $30 per barrel higher for about 570 days—about 19 months.

Curiously, Mark Chapman, principal analyst for oil field services at Enverus Intelligence Research, told Politico that major fracking operators in East Texas won’t be in any hurry to ramp up production because of a temporary spike in prices. “It’s possible private companies could add some extra rigs, but they have limited inventory and there is only so much they can add,” Chapman said.

Enverus subject matter experts weren’t available for interviews over the weekend or on Monday.

Whether or not talks are under way between the U.S. and Iran, and whether or not they progress, Hira said the damage to oil and gas production facilities in the war zone won’t be cleared overnight. “It looks like it could take several years just to restore the infrastructure destroyed in Qatar and South Pars from earlier this week,” he told The Mix.

IEA Executive Director Fatih Birol, who previously described the war as the biggest threat ever to global energy security, said markets won’t immediately recover from a shock so severe. “It will take some time to come back to the normal days we had before the war was started,” he said.

Chevron CEO Mike Wirth added that the war “is doing greater damage to oil and gas markets than Russia’s 2022 invasion of Ukraine,” forcing the industry “to rebuild global petroleum supply chains and inventories,” Politico writes.

“We’ve got a lot of oil and gas now that is not flowing into the market,” he said. “Physical supply chains don’t respond immediately, so even if the strait opens at some point, it will take time to rebuild inventories of the right grades of crude and the right types of fuel.”

But none of that would justify investments in new oil pipelines or liquefied natural gas (LNG) terminals, Hira said.

“My initial take is that it requires a long-term commitment, at least 10 to 15 years of high prices, for investors to believe that a new pipeline for oil or LNG will pay off,” told The Mix. “If I were an investor, I wouldn’t make a 15-year bet right now until I knew more. I would if I saw escalation.”

Even then, “my hope is that the coming shock will push energy insecurity fears to the point where the renewable energy transition is accelerated,” Hira added. “That would be the logical response.” But “the potential payday and vested interests/sunk costs/infrastructure have slowed this down so far.”

The fossil industry sources cited by the Financial Times on Saturday expressed no such caution, even though François Poirier, CEO of Calgary-based pipeliner TC Energy, admitted that the surge in prices will be a “time-bound opportunity”.

Poirier still maintained that “new pipelines should be built to enable producers to respond to crises in the Middle East to bolster the energy security of Canada’s allies and monetize the nation’s natural resources,” the UK-based paper writes.

“The resource is definitely there. Producers are definitely capable of ramping up production to that level. And it’s just a question of responding to what is a time-bound opportunity,” Poirier said. So “we would like to see the underlying regulatory environment get simplified, get streamlined, and timelines accelerated, because that is what will be required to get capital to flow to Canada.”

“This war is yet another screaming example of why it’s in Canada’s national priority and why the global oil market needs Canada to build a new one-million-barrel-a-day pipeline,” said Eric Nuttall, a senior portfolio manager at Toronto-based Ninepoint Partners.