Iran frees oil tanker in fund dispute

South Korean vessel was impounded over billions of dollars seized by Seoul.

DUBAI, United Arab Emirates — A South Korean oil tanker held for months by Iran amid a dispute over billions of dollars seized by Seoul was freed and sailed away early Friday, just hours ahead of further talks between Tehran and world powers over their tattered nuclear deal.

MarineTraffic.com data showed the MT Hankuk Chemi leaving Bandar Abbas in the early morning hours.

Iran’s Foreign Ministry spokesman, Saeed Khatibzadeh, confirmed that Iran had released the vessel, which was seized in January.

“At the request of the owner and the Korean government, the order to release the ship was issued by the prosecutor,” Khatibzadeh was quoted as saying by the state-run IRNA news agency.

The ship’s owner, DM Shipping of Busan, South Korea, could not be immediately reached for comment.

The Hankuk Chemi had been traveling from a petrochemicals facility in Jubail, Saudi Arabia, to Fujairah in the United Arab Emirates when armed Islamic Revolutionary Guard troops stormed aboard and forced the ship to change course for Iran.

Iran had accused the Hankuk Chemi of polluting the waters in the crucial Strait of Hormuz. But the seizure was widely seen as an attempt to pressure Seoul to release billions of dollars in Iranian assets tied up in South Korean banks amid heavy U.S. sanctions on Iran. Iran released the 20member crew in February, but continued to detain the ship and its captain while demanding that South Korea unlock frozen Iranian assets.

Iran’s Foreign Ministry did not acknowledge the fund dispute when announcing the ship’s release, with Khatibzadeh saying only that the captain and tanker had a clean record in the region.

But an official from South Korea’s Foreign Ministry, speaking on condition of anonymity under regulations, said Seoul’s willingness to resolve the issue of Iranian assets tied up in South Korea “possibly had a positive influence” in Iran’s decision to release the vessel.

The official said Iran had acknowledged South Korea’s attempts to resolve the dispute as it became clear the issue was “not just about South Korea’s ability and efforts alone” and was “intertwined” with negotiations over the foundering nuclear deal.

Unfreezing the funds involves the consent of various countries, including the U.S., which in 2018 imposed sweeping sanctions on Iran’s oil and banking sectors. The official said South Korea has been closely communicating with other countries over the frozen Iranian assets.

In January, the United Nations said Iran topped the list of countries that owed the world body at least $16 million. If unpaid, Iran could lose its voting rights under the U.N. Charter.

The development came as Iran and world powers were set to resume negotiations in Vienna on Friday to break the standoff over U.S. sanctions against Iran and Iranian breaches of the nuclear agreement. The 2015 nuclear accord, which thenPresident Trump abandoned three years later, offered Iran sanctions relief in exchange for restrictions on its nuclear program.

President Biden has said that he would like the U.S. to return to the pact.