The law of supply and demand has not been suspended, but as always prices are influenced by market perceptions. It is all about what people believe about the future.
A similar concept to watching people rush to the grocery store for essentials just prior to a storm.
There are many similarities between the current situation and the oil embargo of the 1970s and many differences.

What we are seeing is a greater demand for oil, limited world supply or production capability and a simultaneous drop in the value of the dollar.
Look for more inflation, slow or no rise in wages and eventually a reigning in of what has been a very long period of fiscal excess by our government and consumers. Other countries are not immune, it is just that the dominoes haven't started falling yet, for they too have their excess'.

Just as in the 70's this won't happen over night, we are still feeling the economic impact from the last oil crisis.

The whole concept of managing fiat currency in the correct manner is, as near as I can tell, understood by few or no humans. It is a fairly recent development and full of pitalls, the most obvious of which as another poster pointed out, is controlling the supply of money. Back to that old devil-supply and demand. My guess is that we will see a fairly strong deflationary cycle before it is all over, something already started in the housing and stock markets and one of the rarest events in a fiat currency economy.

There is no need to look under rocks for conspirators, for as always we(mankind, governments) have managed to screw things up through our own mistakes far worse than any targeted conspiracy would dream of under the circumstances.