European powers urged Iran on Saturday to release a British-flagged tanker it seized in the Strait of Hormuz in what Britain called a "dangerous" move, warning its ships to avoid the strategic waterway.
The Islamic Revolutionary Guard Corps said it seized the Stena Impero Friday for breaking "international maritime rules" in the strait, a chokepoint for around a third of the world's sea-borne oil.
The tanker was impounded off Bandar Abbas port for allegedly failing to respond to distress calls and turning off its transponder after colliding with a fishing vessel, authorities said.
Britain said Iran had seized two ships in the Gulf, but the British owner of the Liberian-flagged Mesdar said it had been released after being temporarily boarded by armed personnel.
That came hours after a court in Gibraltar said it would extend by 30 days the detention of an Iranian tanker seized by British authorities two weeks ago on allegations of breaching EU sanctions against Syria.
British Foreign Secretary Jeremy Hunt said Friday's incident showed "worrying signs Iran may be choosing a dangerous path of illegal and destabilising behaviour".
His government advised British ships to avoid the Strait of Hormuz for "an interim period".
"We remain deeply concerned about Iran's unacceptable actions which represent a clear challenge to international freedom of navigation," a spokeswoman said after an overnight meeting of Britain's COBRA emergencies committee.
Germany and France urged Iran to release the tanker, whose seizure Berlin called a "dangerous further aggravation of an already tense situation".
The Guards also said Thursday they had seized another "foreign tanker" and its crew days earlier for allegedly smuggling fuel, without giving further details.
Tensions in the Gulf have soared since May, with US President Donald Trump calling off air strikes against Iran at the last minute in June after the Islamic republic downed a US drone.
Washington has also blamed Iran for multiple attacks on tankers in the Gulf.
Trump said Friday's incident "only goes to show what I'm saying about Iran: trouble. Nothing but trouble."
The Stena Impero had been heading for Saudi Arabia on Friday when it hit a fishing vessel, according to port authorities at Bandar Abbas, off which the tanker is now anchored.
Allah-Morad Afifipoor, director-general of the Hormozgan province port and maritime authority, said experts would investigate the incident.
The Swedish-owned tanker "has 23 crew and they are all on the ship," he said, quoted by Fars news agency.
The Philippines said 18 Indians, three Russians, a Latvian and a Filipino were aboard.
Both Manila and New Delhi said they had contacted Tehran to seek their nationals' release.
Afifipoor said the fishermen had issued a distress call after the collision, contacting the port authority when they "didn't receive any response".
"One of the reasons the British tanker was seized for further investigation was that for a period of time it was moving on its route with its transponder turned off," he told ILNA news agency.
Tracking service MarineTraffic showed the Stena Impero had last signalled its location near the island of Larak at 9:00 pm (1630 GMT).
Its owner said the ship was transiting the Strait and was "international waters" when it was "attacked by unidentified small crafts and a helicopter," the owner said.
Hunt warned that "if this situation is not resolved quickly there will be serious consequences".
But he told Sky News that "we're not looking at military options, we are looking at a diplomatic way to resolve the situation."
The incident came as Trump and American officials insisted, despite denials from Tehran, that the US military had downed an Iranian drone that was threatening an American naval vessel in the Strait.
Trump said the drone had been threatening amphibious assault ship USS Boxer.
The Revolutionary Guards released video footage they said disproved the US claims.
The seven-minute video, apparently shot from high altitude, shows a convoy of ships the Guards said they were tracking as they passed through the Strait.
The vessels could not be immediately identified, although one resembles the USS Boxer.
As tensions soared, Iran's archrival Saudi Arabia said it would once again host US troops to boost regional security.
The Pentagon said the deployment "ensures our ability to defend our forces and interests in the region from emergent, credible threats."
The US military also said its patrol aircraft were monitoring the Strait, and announced a "multinational maritime effort" to ensure freedom of navigation in key waterways.
The escalation comes more than a year after Washington unilaterally withdrew from the 2015 Iran nuclear agreement and began ratcheting up sanctions against Tehran.
Earlier this month, Iran exceeded the deal's caps on uranium enrichment, aiming to pressure the remaining parties to make good on promises to help prop up its economy.
Tehran has repeatedly threatened to close the Strait of Hormuz if attacked.