Adiabatic expansion and viscous dissipation of fluid flow in porous media result in considerable heating or cooling of hydrocarbon fluids when pressure gradients are very large. Traditionally, fluid flow in porous media has been assumed isothermal in hydrocarbon reservoirs. While this assumption helps with simplifying the physics of fluid flow by neglecting the thermal effects, it imposes a dominant impact on fluid properties in situations where flow undergoes fast paced and abrupt changes in flow rate and or pressure. The analytical solutions of fluid flow for pressure transient analysis rely on the isothermal flow assumption. Since the variations of fluid properties are not accounted for in temperature fluctuations, there is an inherent error in standard methods of well test analysis. In this paper, the errors in pressure transient analysis as a consequence of the assumption of isothermal fluid flow are investigated. The magnitude of error is quantified as a function of flow rate and pressure drop. Error analysis shows that at higher flow rates, the thermal impacts are elevated such that the application of isothermal flow models becomes erroneous and invalid. It can be shown that oil well tests are more influenced by thermal effects compared to gas well tests in conventional dry gas reservoirs. This study highlights an important thermal impact that is often neglected and should be considered in the design, execution, and analysis stages of well testing. Also, it suggests that isothermal analytical models should be avoided for well test analysis with large flow rates.