It quoted the Revolutionary Guards as saying the ship had been smuggling one million litres of fuel. The seizure was coordinated with the judiciary and happened in the south of Lark Island.
Iran's Revolutionary Guards said Thursday they had detained a "foreign tanker" and 12 of its crew for allegedly smuggling fuel in the Gulf. Trump called off a planned retaliatory airstrike at the last minute.
Analysts at the Israeli-based maritime risk analytics company Windward said that the Riah has been at sea for the past two years and has a pattern of turning off its location transmitters for days at a time, particularly when entering Iranian waters.
The downing of the drone was just the latest incident to be reported near the Strait of Hormuz, a strategic waterway off Iran's coast which separates the Persian Gulf and the Gulf of Oman.
The IRGC stated that the ship was the same one that they towed after a distress call on Sunday, according to Reuters. So much for the "smart move", explanation, but that doesn't explain much of anything at the moment.
President Trump said USA forces shot down an Iranian drone that was operating too close to an American vessel.
Iran denies involvement but has threatened to respond robustly to USA sanctions that have followed President Donald Trump's abandonment of a 2015 treaty in which Iran agreed to restrict nuclear work in return for the lifting of sanctions.
The incident with the MT Riah came shortly after another Panamanian-flagged vessel, Grace 1, was seized by the United Kingdom in the Strait of Gibraltar.
Commenting on Trump's words, Iranian Foreign Minister Mohammad Javad Zarif said: "We have no information about having lost a drone today".
Officials in the UAE said the ship was neither UAE-owned nor operated and carried no Emirati personnel.
The motive for seizing a ship is patently obvious.
Tensions between Iran and Britain have been high too, with the United Kingdom seizing an Iranian oil tanker off the coast of Gibraltar.
Tensions in the Gulf region are high, with fears that the United States and Iran could stumble into war.
The Iranians are playing with fire with another attack on shipping in the Strait of Hormuz. Iran says the drone was in its airspace, but Washington says it was in global skies.