High oil prices is not the end of the world. In real terms, oil prices increased by more in the 1970s. This spike in oil prices encouraged a wave of innovation and changed consumer behaviour. The rise in oil prices helped to change the use of oil for creating heat energy. Rather than use oil powered electricity generation, countries switched to other forms of energy.
Now that oil prices are rising again, it is likely to see an increase demand for fuel efficient cars. Interestingly, the US is seeing a sharp fall in demand for SUVs which require high gas consumption.
For the consumer, there are many ways to save money on petrol consumption, for example, these top 10 ways to reduce spending on petrol
For oil companies the higher prices are incentives to look for new oil supplies and also try and increase general oil efficiency. British Petroleum have recently changed their tagline to BP Beyond Petroleum, suggesting they are looking into alternatives to oil.
Further Reading
- A World Without Oil - How the world can prosper without oil
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