Whether or not oil was fairly priced in world markets, the fact remains that it is a depletable natural resource, a real form of wealth, and therefore it has to be fairly exchanged by other forms of wealth. In this conversion process, the wealth holder has the right protect himself against constant decline in the purchasing power if paper money if it is used as the medium of exchange. During times of high inflation, paper money cannot perform fully its function as a store of value while prices of commodities have to be adjusted to hedge against the decline in the purchasing power of money. Furthermore, higher prices of oil will serve as the most effective method of achieving conservation as the cheap and abundant oil in the past had led to wasteful use of this valuable natural resource on the one hand and had made it economically difficult to develop alternate sources of energy on the other hand. No matter how much new oil may be found, eventually its reserves will have to drop.
Oil becomes more valuable in economic exchange.
Hence, further incentives are created to develop substitutes for energy in a smooth non-disruptive transition.