Armed men wearing masks reportedly boarded the vessel St Nikolas, close to the Omani port of Sohar, and ordered it to sail to an Iranian port.
Iranian state media, quoting the navy, said the seizure was in retaliation for the ship and oil it had aboard being confiscated by the US last year.
The St Nikolas was in transit between the Iraqi port of Basra and its intended destination in Turkey.
UK Maritime Trade Operations said on Thursday it had received a report that four to five “unauthorised persons”, reportedly wearing “military style black uniforms with black masks”, had boarded the ship at 03:30 GMT.
They added that communications with the vessel had been lost and the authorities were investigating.
Iranian state media quoted the army as saying the vessel is American, although it is Greek-owned.
The company that manages it, Empire Navigation, said it was loaded with 145,000 tons of crude oil and was carrying 18 Filipinos and one Greek citizen as crew.
The St Nikolas was seized in April by the US under its previous name, the Suez Rajan, as part of sanctions enforcement against Iran.
Suez Rajan Limited, which formerly chartered the ship, later pleaded guilty to conspiring to violate sanctions by covertly selling and transporting oil abroad on behalf of Iran.
The US has called for the immediate release of the vessel and its crew, describing the seizure as the latest attempt by Iran to disrupt international commerce.
“We believe this kind of action will simply add uncertainty for commercial shipping and for regional and global economies,” said US State Department spokesman Vedant Patel.
Source: BBC NEWS