Britain repeated its demand Monday for Iran to release a UK-flagged tanker seized in the Gulf, as Prime Minister Theresa May's government held crisis talks on how to respond.
In a dramatic escalation of tensions, the Islamic Revolutionary Guard Corps seized the Stena Impero on Friday in the strategic Strait of Hormuz.
The move came two weeks after British authorities seized an Iranian tanker off Gibraltar on suspicion of breaching sanctions against Syria, and against a backdrop of brinkmanship between Washington and Tehran.
"The ship was seized under false and illegal pretences and the Iranians should release it and its crew immediately," May's spokesman said as she chaired an emergency meeting with ministers and officials.
"We do not seek confrontation with Iran but it is unacceptable and highly escalatory to seize a ship going about legitimate business through internationally recognised shipping lanes."
Iran impounded the tanker after claiming it failed to respond to distress calls and turned off its transponder after hitting a fishing boat.
"Seizing the British tanker was a legal measure by Iran," a spokesman for the Iranian government, Ali Rabiei, told a news conference in Tehran on Monday.
However, Britain has said there was no evidence of a collision and said the vessel was in Omani waters, with its transponder switched on.
Foreign Secretary Jeremy Hunt, who is expected to update parliament on the situation after the crisis talks, spoke to his French and German counterparts on Sunday.
The EU has already expressed its "deep concern" at the move, and on Monday, German Foreign Minister Heiko Maas said: "We don't want any further escalation."
There have been a number of attacks on tankers in the Strait of Hormuz since May, when the US boosted its military presence in response to what it called indications of a "credible threat" from Iran.
- Shipping fears -
Oil prices jumped Monday on fresh concerns about supplies and a possible conflict in the crude-rich Middle East.
The British government had warned its ships to avoid the shipping channel, a chokepoint for about a third of the world's sea-borne oil.
But questions are being asked in London about why it was not more proactive in protecting ships after the Gibraltar incident, which provoked fury in Tehran.
The stand-off comes at a sensitive time for Britain, with May stepping down on Wednesday over her failure to deliver Brexit.
Former foreign minister Boris Johnson is the overwhelming favourite to replace her.
May's spokesman said the high volume of ships moving through the Strait of Hormuz "makes it impossible to escort vessels individually".
However, he said Monday's talks will look at how to reassure commercial vessels in the region, as well as Britain's response to Iran's action.
Finance Minister Philip Hammond said on Sunday: "We've already got a wide raft of sanctions against Iran, particularly financial sanctions, so it's not clear that there are immediate things we can do.
"But we are of course looking at all the options."
- Release Gibraltar ship -
Iranian authorities have said the crew -- 18 Indians, including the captain, three Russians, a Latvian and a Filipino -- are all in good health.
Tehran said at the weekend that the fate of the Stena Impero depends on an investigation into its alleged breach of international maritime rules.
The incident on Friday began hours after a court in the tiny British territory of Gibraltar extended by 30 days the detention of the Iranian tanker, Grace 1, which was seized on July 4.
"To all the countries that are calling on Iran to release the tanker, we ask them to tell Britain the same thing," the Iranian spokesman said on Monday.
The incidents come amid escalating tensions between Tehran and Washington, which have left European nations caught in the middle.
In May 2018, President Donald Trump unilaterally withdrew the US from a landmark 2015 deal that put curbs on Iran's nuclear programme in exchange for sanctions relief.
Britain, France and Germany were also signatories and have been trying to keep the deal alive.
But the US administration reimposed tough sanctions on Iran, which retaliated by increasing its enrichment of uranium beyond limits set in the nuclear accord.
Last month, Trump called off air strikes against Iran at the last minute after Tehran downed a US drone.