Iranian authorities claim to have seized at Emirati boat carrying 250,000 litres of smuggled fuel, al-Araby al-Jadeed reported .

According to Iranian news agency Fars, the coastguard at the southern Iranian port of Bandar Lengeh stopped the boat with the smuggled fuel and four crew members of Indian nationality onboard.

The crew were subsequently handed over to Iranian authorities.

Relations between the two countries - who lie just across the Persian Gulf from one another - are frosty as the UAE is a close ally of Iran's arch-nemesis Saudi Arabia. 

Emirates such as Dubai do, however, maintain strong economic ties.

Contraband, such as cigarettes and electronics, were frequently smuggled to Iran from traders in the region, particularly when Tehran was subject to harsh sanctions.