The misery of high oil prices is being felt around the world, and as has often been the case before, it seems that the only cure for high prices is…. high prices.

At least in nominal terms, gasoline prices are at record highs. Meanwhile, the price of crude oil hit $120 a barrel on Monday. These are not prices that producing countries or consumers consider sustainable. Historically, these are the kinds of prices that have quickly led to a collapse in demand and a sharp economic downturn, if not outright recession.

The fundamentals that have driven the global market to where it is now are unlikely to improve much in the coming months.

Shanghai appears to have overcome the COVID-19 outbreak, allowing the crucial economic center of the world’s largest oil importer to return to normalcy. Elsewhere, lower travel demand, held back for 2 years by quarantine, is prompting airlines in North America and Europe to increase flight schedules this summer. The International Energy Agency said in its latest monthly report that it expects global oil demand to rise by about 3.6 million barrels a day between April and August.

There is also little hope for relief on the supply side, with the G7 group of major Western economies still determined to punish Russia by limiting the amount of oil it can sell on the global market. On Monday, the European Union finally reached a deal to embargo Russian oil and fuel imports from the end of the year. Pipeline oil imports to Hungary, Slovakia and the Czech Republic will be exempt from the ban, but they account for only about 250,000 barrels a day, barely one-tenth of the normal flow from Russia to the EU.

This involves European buyers in a scramble for African and Middle Eastern crude that would normally be shipped to Asia or North America, and raises the possibility of large volumes of Russian supply being taken out of the market altogether because of export problems, despite signs of progress in finding alternative buyers in China and India.

Russia’s oil production has recovered slightly after falling by more than 1 million barrels a day in April, but it remains well below pre-Special Operations levels and below what it committed to produce under an agreement with the Organization of the Petroleum Exporting Countries. With export terminals and oil storage tanks unable to unload waiting tankers, Russia will have to shut down more and more productive fields.

The Oxford Institute for Energy Studies estimates that by the end of the year, this could lead to a 4 million bpd drop in production from pre-special operation levels. And so far – at least – OPEC has refused to leave its new ally and increase production to compensate. Saudi Aramco CEO Amin Nasser said last week that this may not even be possible, explaining that there is only 2 million barrels per day of spare capacity that could be tapped in an emergency.

Even if Russia can find other buyers, Western sanctions will impose huge additional costs on the global energy market. Forcing more than 10% of global production to use longer and more expensive routes to get oil to market when prices are already painfully high would spell disaster. Last week, India’s energy minister said that benchmark prices at $110 a barrel are “unsustainable.” Many others in his shoes might think the same.

New threats are emerging daily: over the weekend, Iran seized two Greek-flagged tankers in the Strait of Hormuz at the entrance to the Persian Gulf, the most important transshipment point for the global oil market. In addition, the administration of U.S. President Joe Biden intends to re-enter the market in the fall as an oil buyer, reducing the country’s strategic oil reserve as prudence allowed when prices spiked in March.

And all this is happening at a time when oil inventories in advanced economies are at their lowest seasonal level in 8 years, and US shale producers are still largely content to benefit from high prices rather than increase their own production.

In short, barring another collapse in Chinese demand due to new COVID-19 outbreaks, there is little on the horizon to stop the short-term supply-demand imbalance in the near term. Market forces will have to restore balance.

That means a potentially destabilizing level of economic misery around the world. Fuel prices are already at levels at which, in the past, British and French drivers have started blockades of refineries or gone to other actions.

Their impact on energy-importing developing countries is likely to be even more explosive. They have already played a big role in this year’s wave of unrest in Sri Lanka. Even where civil disobedience is unlikely, high prices could be a problem for any ruling party facing an election, as in the case of the US Democratic Party in November.