Recent price hikes are mere tremors heralding the real price shock to come. Several recent studies project world oil production to peak by 2013. Even the necessarily conservative International Energy Agency in its World Energy Outlook '98 concurred that global output could top out between 2009 and 2012. Other studies suggest that that by 2040, total oil output from all sources may fall to less than half of today's 25 - 26 billion barrels annually. Running out of oil is not just running out of oil.
Oil is the means by which our industrialized society obtains all other resources.
Oil is also a raw material in medicines, paints, plastics, fertilizer and pesticides. Since oil is directly or indirectly a part of almost everything else, the scarcity of oil and the coming price shock means higher prices all around. This is gossly misleading. Improved technology has simply made a dwindling supply more accessible. Moreover, oil exploration is very much subject to diminishing material returns.