The foreign secretary has urged Iran to reverse its “illegal” seizure of a British-flagged tanker in the Gulf.
Jeremy Hunt said it “raises very serious questions” about the security of British and international shipping in the Strait of Hormuz.
It comes as Iran released new footage of the capture on Friday of the Stena Impero.
Tehran said the vessel was “violating international maritime rules”.
Speaking after a phone call with his Iranian counterpart, Mr Hunt said Iran viewed this as a “tit-for-tat situation” following the detention of an Iranian tanker in Gibraltar.
But he said “nothing could be further from the truth”.
The Stena Impero’s owners said they wanted access at the port of Bandar Abbas to the 23 crew members, who they said are in good health.
BBC security correspondent Frank Gardner said it appears the Iranian Revolutionary Guard was “quite prepared to push this right up to the brink of a conflict, but probably stopping just short of it”.
The Stena Impero was seized by the Iranian Revolutionary Guard on Friday in a key shipping route in the Gulf.
Footage emerged on Saturday appearing to show the moment the tanker was raided.
It was released by Iran’s Revolutionary Guard-affiliated Fars news agency.
It shows masked forces dropping down ropes onto the ship from a helicopter after it was surrounded by high-speed vessels.
A Royal Navy frigate, HMS Montrose, was alerted and raced to intervene, as it did – successfully – with another British-flagged tanker just over a week ago.
But this time it was too far away to stop the Stena Impero being seized – the tanker was already in Iranian waters.
Iran’s state-run IRNA news agency said the tanker was captured after it collided with a fishing boat and failed to respond to calls from the smaller craft.
But Mr Hunt said it was seized in Omani waters in “clear contravention of international law” and then forced to sail into Iran.
The Stena Impero’s Swedish owners, Stena Bulk, said it had been fully complying with regulations and had been in international waters at the time.
It said the crew members, who are Indian, Russian, Latvian and Filipino, were in good health.
A second British-owned Liberian-flagged tanker, the MV Mesdar, was also boarded by armed guards on the same day but was released.
It came after Royal Marines helped seize Iranian tanker Grace 1 off Gibraltar earlier this month, because of evidence it was carrying oil to Syria in breach of EU sanctions.
Iran described the incident as “piracy” but Mr Hunt said the Grace 1 was detained legally in Gibraltarian waters “totally within the law”.
On Saturday, UK government ministers held an emergency meeting of Cobra and a senior Iranian diplomat was summoned to the Foreign Office in London.
Afterwards, Mr Hunt said MPs would be updated on Monday about what “further measures” the government would take, adding the threat level had been raised to the highest level of alert.
“Our priority continues to be to find a way to de-escalate the situation,” he said.
A UK government spokeswoman said earlier it had advised UK shipping to stay out of the area.
What does Iran say?
Iran’s foreign minister Javad Zarif tweeted that the UK “must cease being an accessory to #EconomicTerrorism of the US”.
He said it was Iran that guarantees the security of the Gulf and the Strait of Hormuz.
“Unlike the piracy in the Strait of Gibraltar, our action in the Persian Gulf is to uphold international maritime rules,” he said.
Abbasali Kadkhodaei, spokesman of the state watchdog the Guardian Council, said on Twitter that “the law of retaliation is a recognised concept in international law” shortly after the ship’s seizure was announced.
What’s the background to this?
The latest developments come amid a deterioration in relations between Iran and the UK and US.
Tensions between the US and Iran have risen sharply since April, when the US tightened sanctions it had reimposed on Iran after unilaterally withdrawing from a 2015 nuclear deal.
The US blamed Iran for attacks on tankers in the world’s key shipping area since May – Tehran denies all the accusations.
Unlike the US, the UK government remains committed to the nuclear deal, which curbs Iran’s nuclear activities in return for the lifting of sanctions tensions.
However, the UK’s decision to help seize the Iranian tanker Grace 1 off Gibraltar earlier this month infuriated Iran.
On Friday, Gibraltar granted a 30-day extension to allow authorities to continue detaining the tanker, which was suspected of carrying oil to Syria in breach of EU sanctions.
In retaliation for this seizure Iran had threatened to seize a British oil tanker.
A week later, Iranian boats attempted to impede a British oil tanker in the region before being warned off by a Royal Navy ship, according to the Ministry of Defence. Iran denied any attempted seizure.
A White House National Security Council spokesman said the latest incident on Friday was the second time in just over a week the UK had been “the target of escalatory violence” by Iran.
And US Central Command said it was developing a multinational maritime effort in response to the situation.
The US military said it wanted to promote maritime stability, ensure safe passage, and de-escalate tensions in international waters throughout the Arabian Gulf, Strait of Hormuz, the Bab el-Mandeb Strait and the Gulf of Oman.
The Pentagon has said US troops are being deployed to Saudi Arabia to defend American interests in the region from “emergent credible threats”.
France and Germany called on the Iranian authorities to quickly release the Stena Impero.
Also calling for the release of the ship, the European Union’s foreign affairs office, which represents 28 member states, expressed “deep concern” and urged for “restraint to avoid further tensions”.
The BBC’s Frank Gardner said the British government was in a “bit of a bind” because ministers do not have a great deal of options left.
He said: “What they would like to do is to have a firm, international response, preferably done through allies, possibly with the UN.”
‘A predictable crisis’
The first thing to remember is that this specific row between Tehran and London is only one aspect of an already highly volatile situation in the Gulf.
The Trump administration’s decision to walk away from the international nuclear deal with Iran and to re-apply sanctions is having a hugely damaging impact on the Iranian economy.
Iran is pushing back.
Given the highly fragile and volatile situation in the Gulf, together with the desperate need to bolster the flagging Iran nuclear deal, was it sensible to detain the vessel carrying Iranian oil off Gibraltar?
How ‘British’ is the tanker?
Ships must fly the flag of a nation state, explains Richard Meade, managing editor of maritime intelligence publication Lloyd’s List.
They must be registered in a country, but that doesn’t have to be the same country as its owners, or have any relation to the cargo, he says. But there must be some link to the UK.
“But how you define UK is relative,” Mr Meade says.
The Stena Impero is Swedish-owned and those on board are Indian, Russian, Latvian and Filipino.
But it’s the UK flag that is important symbolically, he says. “Historically speaking it means that the UK owes protection to the vessel.”
“The UK has political responsibilities to anything that is flagged. And that’s why it’s much more serious than if there just happened to be a British captain on board.”
He emphasises that while it was a political issue, the impact on trade in the region had so far been minimal.
But he warns that if the international community began viewing the Strait of Hormuz as a dangerous place to be, that could create a “very different” scenario.
UK faces ‘tricky dilemma’
The defence, intelligence and diplomatic figures attending the government’s Cobra crisis meetings over Iran are facing a tricky dilemma.
Clearly, British-flagged or owned shipping in the Gulf needs protecting but the Royal Navy does not have enough surface ships to do the job alone.
So this would have to be part of a multinational force like the proposed Operation Sentinel being discussed by US Central Command.
The US Navy has plenty of ships in the Gulf – its powerful 5th Fleet is headquartered in Bahrain – but here lies the problem.
Britain and its EU partners are not on the same page as Washington when it comes to the wider policy of dealing with Iran.
The US has pulled out of the nuclear deal, while Europe is trying to keep it alive.
So there is a reluctance by some on this side of the Atlantic to be identified too closely with a hawkish US posture towards Iran or take any actions that may be interpreted as escalating an already volatile situation.