An explosion set an Iranian oil tanker on fire in the Red Sea, news reports said on Friday, and analysts said they believed it was a "terrorist attack" Aljazeera reports.

The blast hit a tanker that belongs to the National Iranian Oil Company and set the vessel ablaze 120km (60 miles) off the coast of the Saudi port city of Jeddah, Iran's Students News Agency (ISNA) reported.

The explosion caused heavy damage and oil is spilling into the Red Sea, unnamed sources told ISNA.

"Experts believe it was a terrorist attack," the news report said.

There was no immediate acknowledgement from Saudi Arabia about the reported explosion. 

Several attacks on oil infrastructure in the Gulf have occurred in recent months amid heightened tensions across the Middle East.

Friday's incident comes after the United States alleged that Iran had attacked oil tankers near the Strait of Hormuz, an accusation denied by Tehran.

Relations between Washington and Tehran have steadily deteriorated since last year's nuclear-deal withdrawal by the United States. 

After pulling out of the landmark accord, the US reimposed crippling sanctions on Iran's oil and banking sectors in what it calls a "maximum pressure" campaign.

Tensions rose further after drone and missile strikes hit a Saudi Aramco facility on September 14, halting about 5 percent of the world's oil supply. 

Several world powers blamed Iran for that attack - but Tehran denied any responsibility.