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U.K. Steps Up Pressure on Iran to Release Seized Oil Tanker

U.K. officials demanded the immediate release of the vessels, one of which later left Iranian waters.

U.K. Steps Up Pressure on Iran to Release Seized Oil Tanker
A support vessel flying an Iranian national flag sails alongside the oil tanker ‘Devon’ as it prepares to transport crude oil to export markets in Bandar Abbas, Iran. (Photographer: Ali Mohammadi/Bloomberg)

(Bloomberg) -- The U.K. government is stepping up pressure on Iran to release a British oil tanker seized in the Strait of Hormuz, an incident that sent tension soaring in one of the world’s critical energy chokepoints.

The U.K. has demanded the immediate release of the Stena Impero and on Saturday summoned Iran’s charge d’affaires, Mohsen Omidzamani, in London. The government threatened Iran with “serious consequences” and advised U.K. ships to avoid the area. Foreign Secretary Jeremy Hunt said in a Tweet Saturday that British shipping will be protected.

Tensions have been flaring in the Strait of Hormuz in recent weeks as Iran lashes out against U.S. sanctions that are crippling its oil exports and the seizure of one of its tankers near Gibraltar. The Strait accounts for about a third of the world’s seaborne oil flows and Brent crude rallied as much as 2.4% on Friday’s news.

“Iran is clearly in a tit-for-tat strategy and for me what happened on Friday is within that framework,” said Olivier Jakob, managing director of consultant Petromatrix GmbH. “I think it will stay like this. In terms of really holding a tanker I don’t think they will do more than this, but we could have more harassment.”

U.K. Steps Up Pressure on Iran to Release Seized Oil Tanker

Iran’s state-run Islamic Republic News Agency said the U.K.-flagged ship was seized after it crashed into a fishing vessel. The 23 members of the crew -- none of whom are British -- will remain on board for safety reasons, IRNA reported, citing Allahmorad Afifipour, an Iranian maritime official.

Stena Bulk, the ship’s owner, said it has been told the crew members are in good health, and that it is seeking to visit them. It has been given no instructions about the fate of the ship, which is anchored at Bandar Bahonar.

Iran’s Revolutionary Guards said on Saturday that the ship entered the strait from the wrong direction, wasn’t paying heed to maritime regulations and could potentially have collided with other ships. State television said the vessel will be held until judicial assessments are complete.

In recent weeks the U.K. Navy has escorted some tankers out of the region, while the U.S. said it downed an Iranian drone just days ago. The latest incident cooled hopes earlier on Friday that the U.S. and Iran would soothe tensions by entering into negotiations with each other.

In Washington, President Donald Trump said he will be “working with the U.K.” and suggested the latest developments justify his harsher approach toward Tehran. “This only goes to show what I’m saying about Iran: trouble, nothing but trouble.” France and Germany expressed their support for the U.K., with both nations demanding the immediate release of the ship and its crew.

On Friday night, U.S. Central Command announced it was putting in place “a multinational maritime effort” called Operation Sentinel that would “increase surveillance of and security in key waterways in the Middle East to ensure freedom of navigation in light of recent events in the Arabian Gulf region.”

Iranian forces had briefly stopped a second tanker and a spokesman for Iran’s Guardian Council suggested earlier Friday that the move against at least one of the ships was in retaliation for the British seizure of Iran’s Grace 1 tanker off Gibraltar. Earlier in the day, a court in Gibraltar ordered the continued detention of the vessel, for another 30 days, after it was held on suspicion of taking oil to Syria. Iran denies that was the destination.

‘Rule of Retaliation’

“The rule of retaliation is something that’s recognized within international law and is used in relation to wrong measures taken by a government,” Guardian Council spokesman Abbasali Kadkhodaei told IRNA.

The second ship, the Liberian-flagged Mesdar, re-established contact with its U.K.-based manager and was moving away from the Iranian coast, according to ship tracking data compiled by Bloomberg. There are no other U.K.-flagged tankers currently in the Arabian Gulf, ship tracking shows.

U.K. Steps Up Pressure on Iran to Release Seized Oil Tanker

The semi-official Tasnim news agency said the Mesdar “was only briefed on requirements for safe navigation and the observance of environmental regulations and allowed to continue on its course,” citing military officials it didn’t identify.

Tensions between Iran and the West have been rising since President Trump pulled out of the 2015 agreement with Iran to limit its nuclear program. The U.S. reimposed the sanctions that that had hobbled the Iranian economy and has been pressuring European allies to respect the sanctions and curtail their trade with Iran.

It had been hoped that tensions between the U.S. and Iran could possibly be lowered through negotiations. An American official earlier in the day said the administration wants to hear directly from Iranian President Hassan Rouhani or Ayatollah Ali Khamenei, the country’s supreme leader, about whether the Islamic Republic is interested in negotiations. That followed comments by Foreign Minister Mohammad Javad Zarif that appeared to signal a willingness to talk under specific conditions.

That optimism quickly waned. Nicholas Burns, U.S. ambassador to NATO during President George W. Bush’s administration, suggested resurrecting a 1980s policy of having tankers accompanied by military escorts in the Gulf.

‘Outlaw Country’

“We should form an international coalition of democratic countries to escort every single commercial vessel through the gulf,” Burns said in an interview in Colorado. “The Iranians are an outlaw, they’re acting like an outlaw country, they’re trying to shut down one of the major waterways in the world and then hold us up on it and blackmail us.”

The Stena Impero is managed by Northern Marine Management, based in Clydebank, Scotland and is, just like Stena Bulk, a subsidiary of Swedish-based Stena AB. The Mesdar is owned by a U.K. subsidiary of Algerian oil company Sonatrach Group.

Friday’s incidents marked at least the second Iranian move against a U.K. ship in just over a week. On July 11, the British Navy intervened to stop Iran from blocking a commercial oil tanker leaving the Persian Gulf. On Thursday, the U.S. said it shot down an Iranian drone that was endangering the Navy ship USS Boxer, a claim Iran has rejected. In June, Trump said he called off a retaliatory strike on Iran following Tehran’s shooting down of an American drone.

“These incidents in isolation are not especially alarming” former U.S. National Security Adviser Susan Rice said at a conference in Aspen, Colorado. But, she added, “in the aggregate they are, given that we’re dealing with players that have little interest in de-escalating.”

--With assistance from David Marino, Stephen Cunningham, Arsalan Shahla, Alyza Sebenius, Josh Wingrove, Kitty Donaldson and Nick Wadhams.

To contact the reporters on this story: Alex Longley in London at alongley@bloomberg.net;Golnar Motevalli in Tehran at gmotevalli@bloomberg.net;Tim Ross in London at tross54@bloomberg.net

To contact the editors responsible for this story: Andrew Davis at abdavis@bloomberg.net, ;Bill Faries at wfaries@bloomberg.net, Lars Paulsson, James Amott

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