Officials from both countries say Indonesian authorities have released an Iranian-flagged tanker seized four months ago over the suspected illegal transfer of oil.
The May 28 move reportedly followed an Indonesian court ruling earlier in the week that the vessel, the MT Horse, could be released and its captain put under a two-year probation without a fine.
A spokesman for the Indonesian coast guard, Wisnu Pramandita, announced the release.
Iran has been accused of disguising the destination of its oil transfers since the United States reimposed harsh sanctions on its exports after Washington withdrew from a major nuclear agreement between Iran and world powers in 2018.
Jakarta said after it seized the MT Horse in late January that it suspected the tanker of an illegal transfer in Indonesian waters.
Iranian officials described the issue as "technical."
The MT Horse last year reportedly delivered more than 2 million barrels of condensate, a mixture of light liquid hydrocarbons similar to a light crude oil, to Venezuela, which is also a target of U.S. trade sanctions.
U.S. and Iranian officials are currently engaged in indirect talks, along with other signatories, to revive the 2015 Joint Comprehensive Plan Of Action, which placed checks on Iran's disputed nuclear program in exchange for relief from U.S. and other international sanctions.