When there is a world demand there is a world supply?

Yes, providing it is technologically possible and the price is acceptable. Like cocaine and heroin. However, there are no yet cures for all diseases, are they?

If fuel price go up, vehicles become more fuel efficient. Like in oil shock of '70s. Houses become better insulated and people rely more on clothing then on air-condition. And yes, more money get invested in search for new oil fields and development of extraction technology.