The vessel, carrying 700,000 liters of fuel, was impounded near Farsi Island of Bushehr Province and the contents were transferred to the provincial branch of the National Iranian Oil Product Distribution Company after coordinating it with judicial authorities, the IRGC Navy said.
"This foreign vessel was receiving fuel from other ships and was transferring it to the Persian Gulf Arab States," Brigadier General Ramezan Zirahi, commander of the local forces, said.
The seven crew members who were all foreign nationals were also arrested, according to Financial Tribune.
The statement did not mention the nationality of the tanker, nor the crew.
IRGC had detained a foreign tanker near Larak Island earlier in July for smuggling 1 million liters of contraband fuel.
The Persian Gulf region has been experiencing tensions in recent months, following several tanker attacks and drone incidents.
Iran has also detained a UK-flagged oil tanker in the Strait of Hormuz for violating maritime regulations. This happened two weeks after an Iranian tanker was seized off the British territory of Gibraltar in the Mediterranean Sea on the suspicion of violating sanctions on Syria.
The seizures happened amid a standoff between Iran and the West over the 2015 nuclear deal. The United States has quit the deal and reimposed sanctions on Tehran that eventually implemented a reciprocal plan by reducing its commitments.