The Adrian Darya 1 oil tanker, formerly known as the Grace 1, has turned off its tracking beacon whilst being pursued by the United States.
The disappearance comes as numerous other Iranian vessels are turning off their Automatic Identification System, masking cargo delivery locations amid US sanctions targeting Iran's energy industry.
Iranian President Hassan Rouhani has reiterated that Tehran will not enter into direct talks with the US unless Washington rejoins the 2015 nuclear deal that President Donald Trump withdrew from over a year ago.
Heavy economic sanctions have also blocked from selling crude oil abroad, a crucial source of government funding for the Islamic Republic.
Carrying approximately $130million worth of crude, the Adrian Darya 1 was last reported to be heading north, 83km off the coast of Lebanon and Syria, before switching off its beacon.
The US alleged in federal court that the ship is owned by Iran's Revolutionary Guard, also declaring the paramilitary group a terrorist organisation, offering greater power to seize the assets on board.
US intelligence stated that the Adrian Darya would head to the Syrian port of Tartus, close to its last location.
Ranjith Raja, a lead analyst at the data firm Refinitiv, says it is "a known fact" that Iranian vessels breaching the US-imposed sanctions. He said:
"The Iranian oil going to Syria is not something new".
Under the landmark 2015 agreement, Iran agreed to limit its enrichment of uranium in exchange for the lifting of economic sanctions.
Addressing Iranian parliament, Iranian President Hassan Rouhani has threatened to take further steps away from the 2015 accord without support from Europe to sell their oil abroad. He said:
"Unfortunately, after America's violation and treachery and its getting out of its commitments, the Europeans too either failed to carry out their duties, or couldn't do so, or both".