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Isn't it interesting that we dislike companies for doing well but not when they fail?
It seems apparent to me that the supply and demand for a product is the driving force behind it's price. As the supply of the world's oil decreases, prices for crude oil rise. If oil prices rise, a higher cost is imposed on the companies that refine oil and sell the products. But cost of inputs into a product do not necessarily determine the price... that is a theory full of holes.
But if costs do have some impact on price, the greater factor is still demand. Why are prices rising so much? Well, there are a wide variety of reasons, but one I find very compelling is that the demand is greater. India and China have huge populations, and they are just now starting to mobilize productive economies in order to become world players. In order to do so, they need energy, and thus oil products. Since there are now many more oil consumers on the earth but still the same (declining) amount of oil, prices will naturally go up. We compete against other consumers and bid up the prices by doing so.
At the same time, oil companies lobby heavily for tax breaks and other government protection, limiting the competition within the oil industry. This also keeps oil prices higher than they could be.
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