Crude oil prices fell on Thursday, with crude futures in New York closing down 2% as talks with Iran on reviving a nuclear deal entered final stages, potentially unlocking more crude supplies, but tensions between top energy exporter Russia and the West over Ukraine limit the decline in oil prices. While the crude oil futures curve shows the market is in one of its strongest periods ever, and prices continue to oscillate wildly. Geopolitical risks, including the potential return of Iranian crude to the market and tensions over Ukraine, have caused oil prices to fluctuate sharply throughout the week and rippled through the market's forward structure. Stephen Brennock of broker PVM oil said the oil market was caught in a tug of war between the lifting of Iran sanctions and Russia-Ukraine tensions.

Both benchmark contracts rose to their highest levels since September 2014 earlier this week, and both will still face extreme backwardation in the months ahead, with front-month contracts priced higher than far-month contracts. The price of the contract indicates a tight supply. Before August, both Brent and U.S. crude futures were in what Mizuho Energy Futures executive director Robert Yawger called "super backwardation," where each month crude futures were at least $1 lower than the previous month.

However, tensions over a possible Russian invasion of Ukraine continue to underpin oil markets, with possible disruptions to energy supplies. Russia denies plans to invade Ukraine.

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