Since 2008, oil has reached its highest price before experiencing a decline.

On Thursday, U.S. oil reached its highest level since 2008, but later reversed course as the market considered supply disruptions from Russia and a potential Iran nuclear deal.

On Sept. 22, 2008, the U.S. oil benchmark traded as high as $116.57 per barrel, while the international benchmark reached $119.84, the highest level since May 2012.

The prices of WTI and Brent declined throughout the afternoon, with WTI ending the day 2.65% lower at $107.67 per barrel and Brent declining 2.19% to $110.46 per barrel.

The ongoing conflict between Russia and Ukraine has been the main focus of the oil market, resulting in a significant increase in prices. One potential solution to alleviate the tight market is a possible agreement with Iran.

According to brokerage PVM, the risk premium is not expected to decrease significantly unless there is a noticeable easing of tension, including concessions from both sides, the lifting of sanctions, and Iran's immediate return to the market to sell its oil from storage until production is increased.

Although both contracts have declined on Thursday, they remain in the green for the week, with WTI up around 19% and Brent advancing 14%.

Prior to Russia's invasion of Ukraine, the oil market was already tight. Now, with countries avoiding oil from key producer Russia, traders are concerned about potential supply shortages.

Canada announced on Monday that it would be prohibiting imports of Russian oil, making it the first country to specifically target Russia's energy industry.

The ripple effects of the sanctions on Russian oil will cause buyers to avoid purchasing it to avoid any potential risks of violating the sanctions.

According to Rystad Energy, Russian oil exports are predicted to decrease by 1 million bpd due to the indirect effects of sanctions and companies' voluntary actions, as stated in a note to clients on Thursday.