Tehran lashes out at Britain for seizing Iranian oil tanker bound for Syria

British Royal Marines seized a giant Iranian oil tanker in Gibraltar on Thursday for trying to take oil to Syria in violation of EU sanctions, a dramatic step that drew Tehran's fury and could escalate its confrontation with the West.

The Grace 1 tanker was impounded in the British territory on the southern tip of Spain after sailing around Africa, the long route from the Middle East to the mouth of the Mediterranean.

Iran's Foreign Ministry summoned the British ambassador to voice "its very strong objection to the illegal and unacceptable seizure" of its ship. The diplomatic gesture lifted any doubt over Iran's ownership of the vessel, which flies a Panama flag and is listed as managed by a company in Singapore.

Panama's Maritime Authority said on Thursday that Grace 1 was no longer listed in Panama's international boat registry as of May 29.

U.S. National Security Adviser John Bolton said the British move was "excellent news."

"America & our allies will continue to prevent regimes in Tehran & Damascus from profiting off this illicit trade," Bolton said on Twitter.

Shipping data reviewed by Reuters suggests the tanker was carrying Iranian oil loaded off the coast of Iran, although its documents say the oil is from neighbouring Iraq.

While Europe has banned oil shipments to Syria since 2011, it had never seized a tanker at sea. Unlike the United States, Europe does not have broad sanctions against Iran.

"This is the first time that the EU has done something so public and so aggressive. I imagine it was also co-ordinated in some manner with the U.S. given that NATO member forces have been involved," said Matthew Oresman, a partner with law firm Pillsbury Winthrop Shaw Pittman who advises firms on sanctions.

"This is likely to have been meant as a signal to Syria and Iran — as well as the U.S. — that Europe takes sanctions enforcement seriously and that the EU can also respond to Iranian brinkmanship related to ongoing nuclear negotiations."

Authorities in Gibraltar made no reference to the source of the oil or the owner of the ship when they seized it.

But Iran's acknowledgment that it owned the ship, and the likelihood that its cargo was also Iranian, drew a link between the incident and a new U.S. effort to halt all global sales of Iranian crude, in what Tehran has described as an illegal "economic war" against it.

European countries have so far tried to stay neutral in that confrontation, which saw the United States call off airstrikes against Iran just minutes before impact last month, and Tehran amass stocks of enriched uranium banned under a 2015 nuclear deal.

Gibraltar gave OK to Britain

In a statement, the Gibraltar government said it had reasonable grounds to believe the Grace 1 was carrying its shipment of crude oil to the Banyas refinery in Syria.

"That refinery is the property of an entity that is subject to European Union sanctions against Syria," Gibraltar Chief Minister Fabian Picardo said. "With my consent, our port and law enforcement agencies sought the assistance of the Royal Marines in carrying out this operation."

A spokesperson for British Prime Minister Theresa May welcomed Gibraltar's move.

Spain, which challenges British ownership of Gibraltar, said the action was prompted by a U.S. request to Britain and appeared to have taken place in Spanish waters. Britain's Foreign Office did not respond to a request for comment.

Iran has long been supplying its allies in Syria with oil despite sanctions. What is new now is U.S. sanctions on Iran itself. They were imposed last year when U.S. President Donald Trump pulled out of an agreement that guaranteed Tehran access to world trade in return for curbs on its nuclear program.

Those sanctions have been tightened sharply since May, effectively forcing Iran off of mainstream crude markets, making it desperate for alternative ways to sell oil and more reliant on its own tanker fleet to store supplies it cannot sell.

The U.S.-Iranian confrontation has escalated in recent weeks, taking on a military dimension after Washington accused Tehran of attacking tankers in the Gulf and Iran shot down a U.S. drone. Trump ordered air strikes but called them off at the last minute, later saying too many people would have died.

European countries opposed Trump's decision to exit the nuclear deal last year and have promised to help Iran find alternative ways to export. But they have so far failed to ease the impact of U.S. sanctions, with all major companies halting plans to invest.

U.S. sanctions cut off Iran's Syrian allies

Iran has said it wants to keep the nuclear deal alive but cannot do so indefinitely unless it receives some of the promised economic benefits. In the past week, it announced it had accumulated more low-enriched uranium than allowed under the deal, and says it will refine uranium to a greater purity than the deal allows from July 7.

By restricting Iran's ability to move oil around the globe, the U.S. sanctions have choked off Tehran's Syrian allies.

Government-controlled areas of Syria suffered acute fuel shortages earlier this year resulting from what Syrian President Bashar al-Assad described as an economic siege. In May, Syria received its first foreign oil supplies for six months with the arrival of two shipments including one from Iran, a source familiar with the shipment said at the time.

"We welcome this firm action to enforce EU sanctions against the Syrian regime and commend those Gibraltarian authorities involved in successfully carrying out this morning's operation," a spokesperson for the British prime minister said.

"This sends a clear message that violation of the sanctions is unacceptable."

Iranian crude exports were around 300,000 barrels per day or less in late June, industry sources said, a fraction of the more than 2.5 million bpd Iran shipped in April 2018, the month before Trump withdrew from the nuclear deal.