Rising geopolitical tensions are driving oil (CL=F, BZ=F) prices higher on Wednesday. The Schork Group principal Stephen Schork joins Market Domination to offer his insights on the current state of the oil market.

Schork highlights market participants are "supremely discounting" the possibility of extended disruptions to global oil supply chains. He provides context by comparing current conditions to those of last October, when oil traded with 36-38% implied volatility. This meant daily price fluctuations typically ranged between $1.10 to $1.20 per barrel. Schork emphasizes that this historical data reveals "this was a risk premium that was never priced into the market."

"This is a telltale that some risk premium is being priced in relative to where we were a year ago," Schork explains to Yahoo Finance. However, he cautions that current pricing may still underestimate potential risks, stating, "That the market has not priced in nearly enough risk, and God help us if we do see an escalation of the war in the Middle East. We know we are going to [see escalation]. The question is: does Israel now go after Iran's oil and gas infrastructure, which has been hinted in the market?"

For more expert insight and the latest market action, click here to watch this full episode of Market Domination.

This post was written by Angel Smith