British Royal Marines captured the oil tanker in Gibraltar on June 27, after being accused of bringing oil to Syria, thus breaching EU sanctions.
According to Reuters, the Grace 1 tanker was seized in UK territory, after sailing around Africa from the Gulf. In addition, shipping data shows that the ship was carrying Iranian oil off the coast of Iran, despite the fact that its documents indicate the oil is from Iraq.
The Gibraltar authorities who seized the vessel, proceeded to this action under the authority of European sanctions against Syria that apply for years. However, they made no reference to the source of the oil.
What is more, the Royal Gibraltar Police has arrested the Indian Captain and Chief Officer of the Iranian tanker 'Grace 1', a few days after the ship was seized.
This followed an examination of documents and electronic devices on board, the police said.
However, UK Foreign Secretary, Jeremy Hunt had informed that the supertanker could be released if the UK is guaranteed the oil is not bound for Syria.
After "constructive" talks with Tehran, Mr. Hunt said that his Iranian counterpart, Mohammad Javad Zarif, wants to resolve the issue and has no desire to escalate the situation, according to BBC.
Mr. Hunt specifically highlighted to Iran's foreign minister that it was the apparent destination of the oil - Syria - that concerns him, not its country of origin - Iran.
However, the Iranian foreign minister insisted his country would continue its oil exports under any conditions.
In a statement issued after the phone conversation with Mr. Hunt, Mr. Zarif said the destination of the oil tanker was a legal one in the eastern Mediterranean, adding that Britain should quickly release the vessel.
In the meantime, last week London said that armed Iranian boats tried to 'impede' a UK supertanker in the Gulf before being warned off by a British warship.
Britain noted that three Iranian boats had attempted to impede the passage of a British oil tanker in the Gulf, forcing UK warship HMS Montrose to intervene.
These incidents come amid a growing tension between Iran and the West, in light of two different cases of attacks against tankers in the Persian Gulf in May and June, as well as the subsequent shooting down of an American surveillance drone by Iranian forces.