Gibraltar refutes Iranian claims that Grace 1 tanker soon to be freed
The UK Navy detained the Iranian oil tanker in early July off the coast of Gibraltar.
The Grace 1 was suspected of transporting oil to Syria in contravention of EU sanctions, an allegation which Iran denies, calling the seizure "piracy".
Jalil Eslami, the deputy head of Iran's ports and Maritime Organisation, said earlier on Tuesday that the UK was "interested" in releasing the Grace 1 to international waters "following the exchange of some documents".
Iran's semi-official Fars news agency also quoted unidentified Gibraltar authorities as saying the tanker would be freed on Tuesday evening, according to Reuters.
Speaking to Reuters, a senior Gibraltarian government source said the report was incorrect.
Gibraltar said earlier on Tuesday it was seeking to "de-escalate the situation".
A Gibraltar court will decide the fate of the Iranian tanker on Thursday, when an order for its detention lapses.
The seizure initiated an ongoing crisis in the Gulf's Strait of Hormuz, a vital world shipping route, with multiple tankers seized.
Just two week after the capture of the Grace 1, Iran's Revolutionary Guards seized a British tanker, the Stena Impero, accusing it of maritime violations.
The UK considers the seizure to have been an illegal retaliation.
British warship HMS Kenton Tuesday set sail for the Gulf to join a US-led mission aimed at protecting merchant vessels in the Strait of Hormuz.
The mission comes amid rising tensions in the region over the past few months.
A series of sabotage attacks on oil infrastructure and tankers and downed drones in the Gulf were followed by a buildup in US troop presence, among other stressors which have seen Saudi Arabia, the UAE, the US and allies lock horns with Iran.