Crude oil prices closed sharply higher on Thursday as geopolitical tensions in the Middle East continued to inject a significant risk premium into the market.

WTI crude settled at $77.29, up $2.07, or 2.75%, while Brent crude settled at $82.49, gaining $3.04, or 3.83%. Brent outperformed WTI as traders placed a larger premium on global supply risks tied to the Persian Gulf, where major exporters including Saudi Arabia, the UAE, Kuwait, Iraq, and Iran itself rely on the Strait of Hormuz as their primary shipping route for seaborne crude.

The latest catalyst came from reports that Iran is considering restrictions on shipping through the Strait of Hormuz, including indications that U.S.- and Israeli-linked vessels could be barred from transiting the strategic waterway. While there has been no confirmed disruption to oil flows, the rhetoric alone was enough to reignite concerns over one of the world's most important energy chokepoints. Roughly 20% of global oil consumption passes through the Strait of Hormuz, making any threat to shipping a significant concern for energy markets. Iran has periodically invoked the possibility of closing or restricting the strait during past confrontations with the West and Israel, though it has never fully followed through, and the waterway has remained open through decades of regional conflict.

The gains also reflected continued uncertainty surrounding diplomatic efforts in the region. Investors are weighing the possibility of progress in negotiations against the risk that any escalation could quickly tighten global crude supplies. The timing of the threat adds complexity for major consuming nations, which hold strategic petroleum reserves as a buffer against supply shocks but face finite capacity to offset a sustained disruption. Until there is greater clarity on the security of shipping lanes, traders are likely to keep a geopolitical premium embedded in oil prices, leaving the market highly sensitive to headlines from the Middle East.

On the technical side, WTI peaked near $78.15 in intraday trading, falling just short of its declining 100-hour moving average at $78.23. Remaining below that level keeps sellers in firmer control, with the 200-day moving average at $76.08 standing as the next downside target.