The war might end this week.
But the $58 billion in oil infrastructure damage will not.
Oil is trading at $80 after crashing 5% on the peace deal announcement.
The war injected a 78% premium into oil prices, taking it from $67 before the war started to a peak of $119 on April 7.
The 1991 Gulf War is the closest historical comparison. That conflict injected a 135% war premium.
The entire premium was erased within 5 months of the peak as the market priced in peace before it was formally declared. If the same pattern plays out, the pre-war level of $67 is where oil is ultimately headed.
But the 1991 comparison stops there.
In 1991, the infrastructure was largely intact when the war ended. The Strait reopened, supply came back, and prices normalised.
That is not what is happening in 2026.
The IEA chief confirmed that more than 80 energy facilities across the Middle East were attacked during this war.
More than 40 of those are severely or very severely damaged across nine countries. Total damage is estimated at $58 billion by Rystad Energy. The minimum repair bill is $34 billion.
The IEA's own estimate is that restoring oil and gas production to pre-war levels could take up to two years.
Oil pipelines, refineries, and gas processing plants are not like light switches. They cannot be turned back on because a piece of paper was signed in Geneva.
Production systems require careful pressure management from deep underground reservoirs.
Equipment needs to be inspected and certified safe before restart. Workers need to return to facilities that were recently under attack. Insurance markets do not immediately return to cover a region that was at war last week.
Shipping companies do not immediately send tankers back through the Strait of Hormuz.
The Strait reopens within 30 days under the MOU. But the physical supply that was supposed to flow through it will take months to years to come back at full capacity.
This matters for inflation directly.
US CPI hit 4.2% in May, the third consecutive monthly acceleration, with energy driving more than 60% of that increase. A peace deal stops the war.
It does not repair a refinery. It does not fix a pipeline. It does not rebuild LNG infrastructure. The energy supply disruption that drove inflation higher does not immediately reverse because the shooting stopped.
The war premium in oil will unwind.
The chart and every historical precedent confirm that. But the underlying supply damage means energy inflation does not unwind at the same speed.
That gap between oil prices falling and energy supply actually recovering, is where the inflation problem sits for the next 12 to 24 months.