pawn

yes, this concept does seem counterintuitive. however, thinking about demand/suppy for oil may help clear things up. oil is probably a finite resource, few theories are out there about oil regenerating itself over thousands of yrs, but we can’t say for sure.
oil producing nations will pump oil based on market/demand prices. they control the amount that enters the market so supply is perfectly elastic because demand for oil is for all intentions perfeclty ineleastic. there are very few substitues for oil, hybrid cars/plugins still not viable option to offset high oil prices. so although the supply oil may be limited suppliers dictate how much they pump based on prices. increased oil prices will also provide incentive for companies to expand exploration to find new sources.
hope that helps