US President Donald Trump has sent a stark warning to Iran, after a British-flagged oil tanker and Liberian-registered vessel were intercepted by the Iranian Revolutionary Guard on the Strait of Hormuz early Friday evening.
"We hope for their sake they don't do anything foolish," he said from the White House.
"If they do, they will pay a price like nobody's paid a price."
Foreign Secretary Jeremy Hunt also slammed the "unacceptable" seizure of vessels, and also warned of "serious consequences".
"Freedom of navigation must be maintained.
"We will respond in a way that is considered but robust.
"We are absolutely clear that if the situation is not resolved quickly, there will be serious consequences."
An emergency COBR meeting is taking place to discuss next steps.
Norbulk Shipping UK has said the crew of the Liberian-registered Mesdar tanker seized in the Persian Gulf are "safe and well", however there has been no word from the British-flagged Stena Impero.
A statement said: "Communication has been re-established with the vessel and Master confirmed that the armed guards have left and the vessel is free to continue the voyage. All crew are safe and well," they said.
The tanker was reportedly boarded by armed personnel at 5:30pm, however there have been no injuries.
British authorities are hoping to hear from the British-flagged vessel, after communication with the tanker was lost at approximately 4pm.
The semi-official Fars news agency reported that the Iranian Revolutionary Guard had seized the Stena Impero and the Liberian-flagged oil tanker for "violating international maritime rules".
A statement from Stena Bulk, the company which owns the tanker, said the firm had lost contact with the crew of 23 after it was approached by "unidentified small crafts and a helicopter" at around 4pm.
The statement said: "Stena Bulk and Northern Marine Management can confirm that at approximately 4pm on July 19, UK registered vessel Stena Impero was approached by unidentified small crafts and a helicopter during transit of the Strait of Hormuz while the vessel was in international waters.
"We are presently unable to contact the vessel which is now heading north towards Iran.
"There are 23 seafarers aboard. There have been no reported injuries and their safety is of primary concern to both owners and managers.
"The priority of both vessel owner Stena Bulk and ship manager Northern Marine Management is the safety and welfare of the crew."
According to the Marine Traffic website, the 183m long ship, left the United Arab Emirates on Friday and was bound for the port of Al Jubail in Saudi Arabia.
The tumultuous relationship between Iran and the US stems from their decision to pull out of a nuclear programme in 2018, which limited Iran’s nuclear activities in exchange for the lifting of economic sanctions.
Since then, the US has imposed more sanctions on Iran, crippling the country’s economy.
However, in recent weeks, tensions have ramped up between Iran and the West, with the White House dispatching warships around the Persian Gulf, and Tehran announcing it plans to exceed its cap on production of enriched uranium.
US President Donald Trump blamed Iran for the attack, and the UK threw its support behind the US, however the Islamic republic denied involvement.
A week later, an American military drone was shot down by Tehran, with Iranian president Hassan Rouhani claiming it violated Iranian airspace.
This brought the US to the brink of retaliation, however Mr Trump called off military strikes when he was told 150 people could die.
Instead, he laid down more financial sanctions, targeting Iran’s supreme leader Ali Khamenei and his associates.
On July 4, royal marines from 42 Commando detain an Iranian supertanker off Gibraltar, after it was suspected of carrying oil headed for Syria.
In response, Iran warned a British oil tanker would be seized in retaliation.