Iranian Navy seized the Stena Impero on Friday in the Gulf's strategic Strait of Hormuz

Britain on Monday said it was planning a European-led protection force for shipping in the Gulf after Iranian authorities seized a British-flagged tanker in a dramatic escalation of tensions in the region.

Foreign Secretary Jeremy Hunt condemned Iran's actions as "state piracy" while at the same time emphasising that Britain did not want confrontation.

"We will seek to establish this mission as quickly as possible," Hunt said, adding that a second warship that Britain has sent to the region would arrive by July 29.

In a ramping up of tensions, the Islamic Revolutionary Guard Corps seized the Stena Impero on Friday in the Gulf's strategic Strait of Hormuz.

The move came two weeks after British authorities seized an Iranian tanker off its overseas territory of Gibraltar on suspicion of breaching EU sanctions against Syria against a backdrop of brinkmanship between Washington and Tehran.

On Monday, Foreign Minister Mohammad Javad Zarif said his country is not seeking confrontation with Britain in a message directed at its likely incoming leader Boris Johnson.

"It is very important for Boris Johnson as he enters 10 Downing Street to understand that Iran does not seek confrontation, that Iran wants normal relations based on mutual respect," Zarif told reporters during a visit to Nicaragua.

He also accused Britain "of doing the bidding for the Trump administration".

Hunt told Parliament that the protection force "will not be part of the US maximum pressure policy on Iran because we remain committed to preserving the Iran nuclear agreement".

The United States pulled out of the nuclear deal last year.

Protection measures

Iran impounded the tanker after claiming it failed to respond to distress calls and turned off its transponder after hitting a fishing boat.

However, Britain has said there was no evidence of a collision and said the vessel was in Omani waters, with its transponder switched on.

The EU has already expressed its "deep concern" at the move and on Monday German Foreign Minister Heiko Maas said: "We don't want any further escalation."

There have been a number of attacks on tankers in the Strait of Hormuz since May, when the United States boosted its military presence in response to what it called indications of a "credible threat" from Iran.

The British government had warned its ships to avoid the shipping channel, a chokepoint for about a third of the world's sea-borne oil.

Hunt said the volume of shipping made it impossible to protect every vessel individually.

Questions are being asked in London about why the government was not more proactive in protecting ships after the Gibraltar incident, which provoked fury and a threat of retaliation in Tehran.

The stand-off comes at a sensitive time for Britain, with Prime Minister Theresa May stepping down on Wednesday over her failure to deliver Brexit.

Former foreign minister Johnson is the overwhelming favourite to replace her and there have been calls for stronger action against Iran, such as financial sanctions.

Oil prices jumped Monday on fresh concerns about supplies and a possible conflict in the crude-rich Middle East.

Release Gibraltar ship

Iranian authorities have said the crew of the British-flagged tanker -- 18 Indians, including the captain, three Russians, a Latvian and a Filipino -- are all in good health.

The fate of the Stena Impero depends on an investigation into its alleged breach of international maritime rules, they added.

The incident on Friday began hours after a court in the tiny British territory of Gibraltar extended by 30 days the detention of the Iranian-chartered tanker, Grace 1, which was seized on July 4.

"To all the countries that are calling on Iran to release the tanker, we ask them to tell Britain the same thing," the Iranian spokesman said on Monday.

Hunt has said Britain wants sufficient guarantees that the oil was not bound for Syria.

The incidents come amid escalating tensions between Tehran and Washington, which have left European nations caught in the middle.

In May 2018, President Donald Trump unilaterally withdrew the United States from the landmark 2015 deal that put curbs on Iran's nuclear programme in exchange for sanctions relief.

Britain, France and Germany were also signatories and have been trying to keep the deal alive.

The US administration reimposed tough sanctions on Iran, which has retaliated by increasing its enrichment of uranium beyond limits set in the nuclear accord.

Last month, Trump called off air strikes against Iran at the last minute after Tehran downed a US drone.