"Oil prices being so high that oil cannot be used economically for anything" vs. "Actually running out of oil" would have the same consequences on modern society.

It can still feasibly be used by those who own the oil stock itself. It's not the inherent cost that is increasing only the market price. As the price rises the market should work to ensure that every last drop of oil is bled from the Earth. If the price goes to high then [in a perfect market] it will drop back to ensure maximum exploitation.

It's only a falling price below the production cost that makes it infeasible to extract surely?

It's better to scare the public with peak oil stories, than actually doing the research and finding out some people are getting rich, and not adding any value to the system in any way.

Does this assume that the only way to move people on from oil dependency is financial. That's largely true I guess.

If not this then what other assumptions/ projections/predictions lead to this conclusion.

Does making scarce things too expensive to buy always constitute "adding value"?

Take, for example, water. Water needs to be expensive because people are using it waste fully because it's cheap. You could have water traders bid up the price of water. Or you could have the government tell people to stop using so much water. I'd personally prefer the government to tell LA and Phoenix they all need to move somewhere that it rains, but that's not going to happen. And I'd rather not see Goldman get rich while people die of thirst. So we'll just run out of water instead. People in Arizona will use it to water their fucking lawns until it runs out.

You could ration it - allow people to sell their ration and reward water conservation; or provide a free allowance with an increasing charge for additional volume. Simply making water the same amount of expensive per litre isn't right IMO. Water should be treated differently as it's such a necessity for life.