Earlier this week the tanker, stopped transmitting its location Saturday while sailing through the Strait of Hormuz. Riah’s last known location was in Iranian waters.

Panama’s Maritime Administration (AMP) condemned Sunday the use of Panamanian-flagged ships for illicit acts, confirming that the tanker Riah seized by Iran was, in fact, smuggling oil.

"We strongly condemn the use of Panamanian-flagged vessels for unlawful acts that threaten the safety of human lives; and those that clearly violate the laws, conventions and international agreements will be sanctioned and will run the risk of the ship being canceled from the Registry," the AMP said in a statement.

The vessel changed its name four times between 2009 and 2019 and is owned by Prime Tankers LLC, based in the United Arab Emirates (UAE), but the company assured that it sold the tanker to the Mouj Al-Bahar company, also located in Dubai. Panama's authorities have deregistered the ship.

Earlier this week the tanker, stopped transmitting its location Saturday while sailing through the Strait of Hormuz. Riah’s last known location was in Iranian waters, yet United States, United Kingdom, and Israeli governments speculated on Iran's intentions for seizing the ship.

"The vessel that Iran towed to its waters after receiving a distress call, was later seized with the order from the court as we found out that it was smuggling oil," Iran’s Revolutionary Guard Corps reported in a statement on Thursday.

Oil prices initially rose more than one percent Thursday after Iran announced sizing the foreign tanker but prices gradually lost their gains as it emerged that the vessel had a small cargo.