The non-score at Le Mans for the #7 crew, which resulted from Kobayashi being hit by two cars as he reduced speed for an 80km/h Slow Zone, followed a problem with one of the official series sensors on their GR010 at the Portimao round in April.
That restricted them to ninth position and only two points.
Conway believes that the 41-point gap to the sister #8 Toyota GR010 HYBRID Le Mans Hypercar driven by Sebastien Buemi, Brendon Hartley and Ryo Hirakawa is too big to realistically overcome over the final three races, which begin this weekend with the Monza 6 Hours.
"Unless #8 has a complete disaster for the rest of the season, I don't think we are going to win the championship," he told Motorsport.com.
"After what happened at Le Mans, the world championship seems out of reach this season for our car unfortunately. But to try to get second or third is something we can aim for."
The crew of the #7 Toyota lies fifth in the Hypercar championship, only one point behind Ferrari drivers Antonio Fuoco, Nicklas Nielsen and Miguel Molina and four in arrears of the Cadillac trio of Earl Bamber, Alex Lynn and Richard Westbrook.
The Le Mans-winning Ferrari 499P LMH line-up of Antonio Giovinazzi, James Calado and Alessandro Pier Guidi is a further 12 points away in second position, 25 points behind Buemi and his team-mates.
Conway, Kobayashi and Lopez are the only Hypercar line-up to have won twice this year, at Sebring and then Spa, but because double points are on offer at Le Mans their championship chances have effectively been torpedoed.
"It can really skew the championship; the whole double-points thing for Le Mans is a bit annoying," he said.
"When they pulled back from that, it made the championship much more exciting."
Points and a half were awarded for the two editions of Le Mans incorporated into the 2018/19 WEC 'superseason', which meant 38 rather than 50 points for victory.
The fact that a repeat of the 2019/20 and 2021 titles for Conway, Kobayashi and Lopez is now effectively out of reach "only simplifies the task for the remaining three races", added the Briton.
"We want to rack up more wins this season, starting at Monza, and we will be pushing hard to get back on the top step of the podium," he said.
Conway conceded, however, that the #7 Toyota may have to play a backup role to boost the championship chances of the drivers in the sister car.
"We might have to help them out as much as we can," he explained. "They have a good chance to win it and obviously we'll help them if they need it."
Kobayashi, who is also team principal of the Toyota Gazoo Racing WEC squad, said that after the disappointment of Le Mans the team's "big priority now is to win both world championships".
Toyota, which has won three of the four WEC rounds so far this year, leads the manufacturers' standings by 18 points from Ferrari.
Free practice for the Monza 6 Hours, round five of the 2023 WEC, begins at 11:30 local time on Friday.
