We present an experimental and theoretical study of vibrational excitation of the C-O stretch vibration of carbon monoxide adsorbed on a ruthenium Ru(001) surface with ultrashort femtosecond infrared laser pulses. After broadband excitation leading to transfer of a significant fraction of the CO molecules to their first (similar to 15%) and second (similar to5%) vibrationally excited states, we observe a competition between vibrational energy relaxation and energy delocalization through dipole-dipole coupling. We reproduce the observed excited state spectra by solving the three-level Bloch equations and accounting for intermolecular vibrational energy transfer on a picosecond time scale. The rate of vibrational energy transfer, and its coverage-dependence, can be described by a Forster energy transfer mechanism. We discuss possibilities to optimize the degree of localized vibrational excitation of a specific bond of molecules at surfaces through chirped pulse IR excitation.