Taylor Rule: Relationship between interest rate and inflation
It's true that in response to an oil shock, the Taylor rule could recommend increasing the interest rate to reduce inflation. In practice it would mean that as interest increases, consumption falls. This could be from less credit financed spending, or because the opportunity cost of holding money has increased, therefore people invest more in illiquid assets (bonds in an IS-LM context) and therefore consume less. As consumption falls, aggregate demand falls, therefore putting pressure off prices causing a reduction in inflation.

Note: an oil shock might also increase the output gap, so its not inherently clear what the taylor rule would say in this situation.