Iran and the U.K. are making progress toward the release of an Iranian tanker impounded in Gibraltar, according to people familiar with the talks, a move that could prompt Tehran to free a British-flagged vessel it subsequently seized and defuse tensions between the two countries.
Iran has lifted several stumbling blocks by reflagging the vessel and setting a new destination after Gibraltar sought assurance that the ship wouldn’t sail to Syria, according to people familiar with the matter.
Gibraltar, a British overseas territory, seized an Iranian tanker called Grace 1 in early July with the assistance of British Royal Marines. U.K. authorities said the tanker was headed to Syria in violation of European Union sanctions, which Iran has denied. Iran threatened retaliation and two weeks later captured the British-flagged tanker Stena Impero in the Persian Gulf, accusing the ship of breaking international maritime rules.
Iran’s threat to commercial shipping in the Strait of Hormuz—through which a third of the world’s seaborne oil is transported—added to already high tensions between the West and Iran after the Trump administration imposed crippling sanctions on Tehran. Shipping premiums rose and some vessel owners started to avoid the region. The U.K. has since sent a second warship to protect British vessels in the area and said it would join a U.S.-led coalition to protect maritime traffic there.
The tanker standoff also complicated European efforts to salvage the 2015 Iran nuclear deal, from which the U.S. withdrew last year.
People familiar with the seizure of the Iranian tanker in Gibraltar said progress was made after the vessel received a new flag and a new destination in Morocco and then, more vaguely, to somewhere in the Mediterranean. The Grace 1 lost its registration with Panama in May due to U.S. sanctions but is now being registered under an Iranian flag, one person said. Most ports refuse docking to vessels without flags.
Attempts by Gibraltar to resolve the crisis have been impeded by several hurdles, including Iran’s own tactics in circumventing U.S. sanctions. The oil in the tanker was declared as Iraqi, according to people familiar with the cargo’s situation, a common Iranian practice to evade sanctions. Iraqi authorities denied ownership of the oil.
Iran has also exchanged certain documents that would help the U.K. release the tanker, Iranian state news agency IRNA reported Tuesday, citing the country’s port authority.
Iran didn’t elaborate on the nature of the documents exchanged but British authorities have previously said they would release its tanker if Tehran could guarantee the cargo wouldn’t be sent to Syria.
“We hope this problem will be resolved in the near future, and that the vessel can continue to operate under the flag of the Islamic Republic of Iran,” Jalil Eslami, deputy head of the Ports and Maritime Organization of Iran, said at a press conference in Tehran, according to state news agency IRNA.
The Iranian owners of the vessel, the TNC Group, based in the United Arab Emirates and Georgia, have now issued new documentation replacing the previous bill of lading that described the cargo as Iraqi oil, a person familiar with the matter said. TNC is now considering sending the cargo for storage in Morocco while seeking a buyer, that person said.
TNC’s manager, Capt. Ahmed Asadpour, didn’t return a request for comment.
Gibraltar briefly detained four Grace 1 crew members, and they remain in the territory. Its authorities on Tuesday said they were trying to resolve the standoff ahead of a court decision Thursday over whether to extend the detention of the vessel.
“We continue to seek to de-escalate issues arising since the lawful detention of Grace 1,” a spokesman for the government of Gibraltar said.
A U.S. official said Tuesday that Washington wouldn’t try to block the release of the Iranian tanker as long as it didn’t go to Syria or Iran.
Iran hasn’t formally said it would release the U.K. vessel if its own tanker was freed in Gibraltar. But Iranian officials have indicated such a move would help end the detention of the Stena Impero.
A spokesman for Sweden’s Stena Bulk, which owns the Stena Impero, said there had been no progress at this stage toward the release of the vessel and its crew in Iran.
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