The world is "awash" in oil at $110, but that oil simply can't be produced fast enough to meet demand.
That's the fundamental problem.
That's the fundamental problem.
This thinking generally leads people to miss OP's point, which is that the world will never run out of oil. Price will always fluctuate to meet demand (so long as we let the market set the price).
If you want to open an oil field or a refinery you need billions of dollars and a financial projection that says the oil will stay at $X dollars for at least Y years.
Since most people aren't convinced that oil will stay at $110 dollars for the foreseeable future they'd rather not risk billions of dollars.
If you can accurately predict oil prices stop reading hacker news and open a commodities account.
The hydrocarbons that become economic at higher oil prices fundamentally cannot be produced as quickly as conventional reserves. It's a matter of permeability. Not a matter of economics.
Also, I'd wager I'm far more aware than you think of the investments required to explore, develop, and produce a prospect. (I know nothing about refining, though.)