Oil spike unwarranted according to government official

Here's a piece I saw on Marketwatch.com: 

The spike in oil prices doesn't reflect fundamentals in the market, according to the top economics official at the State Department. "I think the increase in prices is considerably greater than the decline in supply would ordinarily suggest," said Robert Hormats, under secretary of state for economic, business and agricultural affairs, at the National Association for Business Economics annual policy conference.

In some sense he is correct, but like it or not a risk premium has definitely been built into the price of oil amid worries that an escalation in violence could spread to other oil producers and further squeeze supply.