Reports said Saturday that the oil tanker, named Happiness I, had been released and was heading towards Iran’s waters.
There was no immediate confirmation from Saudi or Iranian authorities.
On May 2, Saudi Arabia announced its coast guard had rescued a distressed Iranian oil tanker with 26 on board off the Red Sea port of Jeddah, after it faced "engine failure and the loss of control."
According to Iranian officials, the incident occurred on April 30 while Happiness I was on its way to the Suez Canal and that water had leaked into the tanker’s engine room.
Despite being fixed, Saudis were refusing to let the vessel leave, and at the same time were demanding that Iran should pay $200,000 a day for maintaining the vessel in Jeddah.
Iranian officials slammed the Saudi demand, describing it as “illegal.”