Iran has said it is set to release the British-flagged tanker whose seizure by the Islamic republic more than two months ago sparked a crisis over energy security in the Strait of Hormuz, a vital sea route for oil.

An Iranian government spokesman said it “can leave and decisions [made by the judiciary] suggest the seizure has ended”.

The Stena Impero has been at the centre of a stand-off between the UK and Iran after the Islamic Revolutionary Guard Corps seized it in mid-July in apparent retaliation for British Royal Marine commandos’ impounding of an Iranian supertanker, the Grace 1, off Gibraltar two weeks earlier.

The UK detained the Grace 1 — since renamed Adrian Darya 1 — because it was suspected to be shipping Iranian crude to Syria in violation of EU sanctions. Gibraltar has since released the Iranian ship, whose fate is unknown. Iran said it seized the Stena Impero because it had failed to observe international maritime rules and regulations.

The row over the tankers comes amid escalating tensions between Iran and the US, which abandoned the Iranian nuclear deal last year and reinstated sanctions on oil exports from the Islamic republic.

The threat of a regional conflict between the US, its Arab allies in the Gulf and Iran dramatically heightened last week in the wake of drone attacks on Saudi Arabia’s biggest oil facility. Riyadh was forced to suspend more than half its daily production, a move that rocked the energy market.

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Iran has denied any involvement in the drone attack, though US, UK and Saudi officials have voiced suspicions that Tehran engineered and provided drones and missiles for the attack. Yemen’s Houthi rebels, backed by Iran, claimed responsibility. Iran also shot down one unmanned US drone in June and is accused of organising attacks on at least six oil tankers off UAE coasts in May and June.

While the US is reluctant to get involved in a military confrontation, Iran has rejected calls from the White House for negotiations as long as sanctions are in place.

“Iran has remarkably changed the rules of the game in its favour [in recent months]. Now, everyone wonders what is the next thing Iran is going to do?” said a senior western diplomat in Tehran. “While the US is trying to negotiate with Iran, the Islamic republic is playing hard to get and speaks from a strong position.”

In New York this week to attend the UN General Assembly, Iran’s centrist president Hassan Rouhani is due to put forward a proposal for a security pact to safeguard the Strait of Hormuz. Mr Rouhani said on Monday that the damage to Saudi oil facilities had been exaggerated by the US deliberately to expand its presence in the region.

“The damages that can be repaired in two weeks, they say could take longer than one month,” Mr Rouhani said before leaving Tehran. “It is clear the US seeks other goals in this region.”

Via Financial Times