“MARKETS DO what markets do.” So Chris Wright enlightened a Houston ballroom full of oilmen on March 23rd. America’s energy secretary was the opening speaker at CERAWeek, an industry jamboree, where he set an upbeat tone. War may be raging and oil markets gyrating; but in America’s shale capital, good times were to be had.

After all, in Texas $100 oil is usually cause to pop champagne. Rystad, a consultancy, estimates that if prices average that level over the year, American oil firms will enjoy a windfall of over $60bn. Pedlars of liquefied natural gas (LNG) also stand to benefit handsomely, as the shutdown at Qatar’s national energy company renders nearly a fifth of the world’s supply unavailable, possibly for months. The share price of Venture Global, an American LNG firm, has doubled in the past month. The mood at its CERAWeek party was ebullient.

For Mr Wright, a former shale boss, it seemed there was little not to like about the war. “Prices have not risen high enough yet to drive meaningful demand destruction,” he insisted, but are up sufficiently for producers to start cranking out more supply. There is, however, cause for sobriety, on three counts.

First is the war’s uncertain duration. President Donald Trump appears to be looking for a way out of the conflict, though it could well last for months, especially if Iran keeps the Strait of Hormuz choked off. At CERAWeek Jim Mattis, a retired general who served as secretary of defence during Mr Trump’s first term, described in detail how Iran could maintain its grip over the shipping route. “I can’t identify a lot of good options,” he concluded. Even so, Mike Wirth, boss of Chevron, cautioned that markets are trading on “scant information”.

The uncertainty may keep America’s drillers from ramping up supply—a second reason to temper the enthusiasm. Shale executives at CERAWeek made it clear that they intend to stick to capital discipline; their investors, who lost some $300bn in the previous shale bust, have not forgotten it. Raoul LeBlanc of S&P Global argues that there will need to be at least two quarters of $100 oil and a futures curve soaring upwards to persuade them to expand capital expenditure.

Matthew Bernstein of Rystad adds that low prices and investment cuts last year have run down the working inventory of wells that can quickly be brought online. And even if drillers were to start investing immediately, it would take “three to nine months to show up in volumes”, according to Fraser McKay of Wood Mackenzie, another consultancy.

The natural-gas market in America may prove even less responsive. It is largely insulated from global gyrations: low prices continue to prevail at the Henry Hub, the domestic benchmark, even as they soar elsewhere. Enrique Gonzalez of BloombergNEF, a research group, argues that this makes it “unlikely for the Iran conflict to drive US natural-gas production growth in the short to medium term”.

The lack of a supply response will keep global prices—and profit margins—high. But in the long term it will also add fuel to a third problem: demand destruction. There is already evidence of this in Asia, the region most reliant on Middle Eastern energy. Even before the conflict, some predicted that global demand was set to peak within a few years, thanks to the policy threat from climate legislation and the innovation threat from cheap renewable power and electric vehicles. For now, America’s oilmen are celebrating. When they reconvene next year, the mood may be less buoyant.