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An seized by Greece in April, part of whose cargo was confiscated by the United States, was being towed to the port of Piraeus on Saturday, Greek coast guard officials said, after Greek authorities approved its .

For over two months the Iranian-flagged Lana, formerly , has been anchored off the Greek island of Evia in a diplomatic impasse which has with Tehran amid growing tensions between Iran and the United States.

"It left Karystos at 06:30 am (0330 GMT) and is expected to reach Piraeus around 10:00 pm," one official said.

Greek authorities in April impounded Lana and its oil cargo with 19 Russian crew members on board near the coast of Evia, due to sanctions following a legal action by the United States.

The ship was later released due to complications regarding its ownership, but part of the Iranian oil cargo had already been transferred to another ship, Ice Energy, which was hired by and is moored off Piraeus port.

The removal of oil from the Lana prompted Iranian forces last month to seize two Greek tankers in the Middle East Gulf and sail them back to Iran after Tehran warned it would take "punitive action" against Athens.

Following an appeal by an Iranian company on June 7, a Greek judicial panel overturned the initial court order that allowed the confiscation of the cargo on behalf of the United States.

That decision has cleared the way for Lana to retrieve the cargo that was transferred to .

Until last week however Lana, which still has engine problems, was being detained by another company due to debts owed for towing services. It was officially released after the amount owed was paid off, legal sources told Reuters.

(Reuters)