Omani fishermen and police rescued all 11 crew on board, Oman's ONA state news agency reported.
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The vessel's cargo was loaded in the UAE emirate of Sharjah, but the ship sank in the Arabian Sea 15 nautical miles off AS-Suwayh because of a "technical fault", it said.
The Times of Oman said the ship was carrying 69 vehicles, food, tyres and engine oils and had been bound for the port of Mukalla in southeast Yemen.
UAE daily Gulf News said the ship sank because of overloading.
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