A senior official in Gibraltar has denied reports that an Iranian tanker seized near the British overseas territory is poised to be released.

The official said a report by Iran’s semi-official Fars news agency that the Grace 1 tanker is leaving on Tuesday night are “untrue”.

The tanker was seized last month in a Royal Navy operation off Gibraltar, on the tip of southern Spain.

It is suspected of violating European Union sanctions on oil shipments to Syria, and its seizure deepened international tensions in the Persian Gulf.

The Gibraltar government says it is seeking to “de-escalate” the situation over the Grace 1.

The Gibraltar Supreme Court is scheduled to hold a hearing on the case on Thursday.