The UK Foreign Secretary is warning Iran that it faces “serious consequences” if does not release a UK ship seized in the Strait of Hormuz yesterday.
Jeremy Hunt described Tehran's seizure of two UK flagged ships yesterday as "unacceptable."
He was speaking after a meeting of the UK Government’s COBRA emergency committee.
One vessel has since been released, but the owners of the other have said they are unable to make contact with it.
UK ships are being advised to stay away from the area until the situation is resolved.
“We will respond in a way this considered by robust,” said Mr Hunt. “We are absolutely clear that if this situation is not resolved quickly, there will be serious consequences.”
A UK government spokesperson said Iran's actions were "unacceptable" adding that officials will be meeting with the UKs international allies over the weekend.
The Stena Impero – the ship that remains in Iranian custody – is owned by Swedish company Stena Bulk but sails under a UK flag.
The company said it was approached by unidentified small crafts and a helicopter as it passed through the Strait of Hormuz at around 4pm yesterday.
"The vessel was in full compliance with all navigation and international regulations," it said.
The Iranian Revolutionary Guard said it seized the ship for "violating international maritime rules."
An Iranian official told Fars News this morning that it was involved in an accident with an Iranian fishing boat and had "ignored" the boat's distress call.
The tanker is reported to be at Iran's Bandar Abbas port, with all 23 crew members still on board.
Fars said they would remain there until the end of the investigation.
Mr Hunt said Iran's actions were "completely unacceptable", but said he wanted a diplomatic solution to the incident.
He said: "We're not looking at military options; we are a looking at diplomatic way to resolve the situation.
"But we are very clear that it must be resolved."
US President Donald Trump said he will discuss the situation with the British government.
"We will talk to the UK and we have no written agreement but we have an agreement. They've been a very great ally of ours.
"They will have a new prime minister soon, which is a good thing, and we will be working with the UK - but we have no written agreement, but I think we have an agreement which is longstanding."
Meanwhile, the Pentagon has confirmed plans to send more than 500 troops to a Saudi airbase in response to the heightened tensions with Iran.
The US is also sending fighter aircraft and air defence missiles to the area.