Few people believed at the start of the year that oil prices would have soared through the $65 a barrel level by now. Given that an oil price hike is generally blamed for triggering the 1970s recession, does it mean our economy is headed down?

Things are different. We don't have the inflation now, but oil prices do impact on growth, Graham Searjeant, Times financial editor, points out:

According to the Organization for Economic Cooperation and Development, a $10 per barrel change in the price of crude oil should affect the output of the world economy by about 0.6 per cent, other things being equal.

This time it is a simple market effect. The demand, mainly from China, given limited supply, is putting upward pressure on prices. Higher fuel prices mean that production and transport cost more, so less is bought and the economy under-performs.

High oil prices make it more worthwhile to develop new reserves. They make it profitable to develop hard-to-access supplies such as oil shale. They make it more worthwhile to develop alternatives to hydrocarbon energy. They encourage us to be less dependent on Middle East sources. They are bringing forward the hydrogen economy. In other words, they send market signals we respond to.

Those who want us less dependent on fossil fuels should find cause to celebrate the discipline which high oil prices impose.