Iranian tanker reloading oil in Greece that was confiscated by US

An Iranian-flagged tanker is reloading oil that was confiscated by the United States earlier this year after Greek authorities approved the release of the cargo, sources familiar with the matter said on Friday.

The case has strained relations between Athens and Tehran amid growing tensions between Iran and the United States after Washington hired a tanker in April to impound the oil onboard the Lana tanker, which had been anchored off Greece.

The removal of oil from the Lana, formerly the Pegas, prompted Iranian forces in May to seize two Greek tankers in the Middle East Gulf, which have not yet been released.

The Lana had been anchored off the Greek port of Piraeus since late July waiting to reload part of its oil consignment held on the Ice Energy tanker, which was chartered by Washington and had been expected to sail to the United States before Greece's supreme court ruled the cargo should be returned to Iran.

"The transfer has started," said a source with knowledge of the matter, on condition of anonymity.

A second source said the transfer process started on Friday and that it was expected to be completed in days.

There was no immediate response from Iran on Friday, which had previously warned of "punitive action" against Athens over the confiscation.

A U.S. State Department spokesperson said in July that Washington was "respectful that this case went through the Greek judicial process".

Claire Jungman, chief of staff with U.S. advocacy group United Against Nuclear Iran, which monitors Iran-related tanker traffic through ship and satellite tracking, said Greece as a U.S. ally "had an opportunity to take a stance".

"Instead, this decision by the Greek courts tells Iran that there are no repercussions for its hijacking of tankers," Jungman told Reuters.