Libyan anti-government rebels, who are calling for a greater share of oil wealth and autonomy, had managed to load crude oil onto the 37,000 tonne-tanker, which escaped the Libyan navy, embarrassing the weak central government and prompting parliament to vote the prime minister out of office.
No one was hurt in the boarding operation, approved by U.S. President Barack Obama, requested by the Libyan and Cypriot governments and conducted in international waters southeast of Cyprus, Pentagon Press Secretary John Kirby said.
"The Morning Glory is carrying a cargo of oil owned by the Libyan government National Oil Company. The ship and its cargo were illicitly obtained" from the Libyan port of Es Sider, his statement said.
The Cypriot ministry of foreign affairs said the vessel was now heading west in the Mediterranean with a U.S. military escort. It was parked 18 miles (29 km) southwest of Cyprus when the operation occurred around midnight Cyprus time.
The standoff over control of OPEC member Libya's oil is one facet of wider turmoil that has engulfed the vast North African country since the fall of Muammar Gaddafi nearly three years ago.
The government and nascent army have struggled to control brigades of former anti-Gaddafi fighters who have refused to disarm and have used their military muscle to make political demands on the state, often by targeting the vital oil sector. (Reporting by Chris Michaud; Editing by Andrew Heavens and Dale Hudson)