Oil prices spiked to their highest levels since 2008 on fears that tensions with Iran have the potential to disrupt supplies through the Strait of Hormuz.

The price of a barrel of brent crude hit $128.40 a barrel and eclipsed $110 on the New York Mercantile Exchange after a disputed report Thursday on Iran's Press TV and other Middle East outlets of a pipeline explosion in Saudi Arabia.

Prices for brent crude dropped to $125.45 and $108.50 on the NYMEX early Friday.