If MacGyver did it then it must be true.

Didn't you fools watch MacGyver? There was a good episode about it
The explosion displaces the jet of flamible substance away from the flame,and explosively sucks oxygen out of the surrounding area
http://www.jwco.com/technical-litterature/p09.htm

Think of it this way, it's like blowing on a candle, but instead of a few ounces of force, your blowing on it with a tens of thousands of pounds of force.

You want a good movie example that's actually based on Red Adair, go get 'Hellfighters' (1968) with John Wayne, Katherine Ross, Jim Hutton & Vera Miles.
It shows them going it multiple times, from clearing the damaged rig structure, rigging the charges on the special tractors, and then not only blowing it out, but placing the control head on, bolting it down ~carefully~, and then spinning the valve-wheel to close off the gushing oil.
'Nuff Said.

Red Adair

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they do use explosions in oil fire's and i'd imagine it's simply smothering the fire with dislodged earth caused by the explosion, plus sealing it will cut off the oxygen supply. Simply a big fire bucket of sand.

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Thanks!

Always sounded strange to me too when I first heard about it.
http://en.wikipedia.org/wiki/Oil_well_fire
Oil well fires are more difficult to extinguish than regular fires due to the enormous fuel supply for the fire. In fighting a fire at a wellhead, typically high explosives, such as dynamite, are used to create a shockwave that pushes the burning fuel and local atmospheric oxygen away from the well. (This is a similar principle to blowing out a candle.) The flame is removed and the fuel can continue to spill out without catching on fire.
Wait a minute who am I here?