LONDON — Gibraltar on Sunday rejected a renewed U.S. request that the British overseas territory not release a detained Iranian oil tanker.
The tanker, Grace 1, was impounded last month in a British Royal Navy operation.
It was suspected of violating European Union sanctions on oil shipments to Syria — an ally of Iran — and its seizure deepened international tensions in the Persian Gulf.
In a statement, Gibraltar's government said the ship would be free to go as U.S. sanctions on Iran had no equivalent in the United Kingdom or the rest of the E.U.
The U.S. had unsealed a warrant Friday to seize the vessel, a day after Gibraltar lifted the ship's detention.
The vessel remains at anchor off Gibraltar, laden with 2.1 million barrels of Iranian light crude oil.
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A new crew is expected to arrive and sail the tanker to an undisclosed destination as early as Sunday.
The U.S. government claimed in court documents that the Grace 1 was part of a scheme to support illicit shipments from Iran by that country’s Revolutionary Guard Corps, designated a foreign terrorist organization in the U.S.
The unsealed documents said that the oil tanker engaged in "deceptive voyages" from Iran to other locations, including Syria.
But Gibraltar's government said on Sunday that it was unable to fulfill the U.S. request because of "differences in the sanctions regimes applicable to Iran in the E.U. and the U.S."
"The E.U. sanctions regime against Iran, which is applicable in Gibraltar, is much narrower than that applicable in the U.S," the statement said.
Gibraltar’s chief minister, Fabian Picardo, said on Thursday that he received a written assurance from Iran government that if released, the destination of Grace 1 would not be an entity that is subject to E.U. sanctions.
"In light of the assurances we have received, there are no longer any reasonable grounds for the continued legal detention of the Grace 1," he said.
Iran has insisted that the Grace 1 was never bound for Syria and called the seizure an illegal act.
The decision to lift a detention order on Grace 1 raised hopes that Iran would reciprocate the gesture and release Stena Impero, a British-flagged and Swedish-owned tanker seized by Iran’s Revolutionary Guard for “violating international regulations” just weeks after Grace 1 was impounded.
The Stena Impero remains in detention.
Video footage and photographs obtained by Reuters on Sunday showed the Grace 1 tanker flying the red, green and white flag of Iran and bearing the new name of 'Adrian Darya-1' painted in white on its hull.
Its previous name, Grace 1, had been painted over and the vessel's anchor was still down.
The two vessels have become embroiled in the larger atmosphere of hostility since the United States last year pulled out of an international agreement to curb Iran's nuclear program and reimposed economic sanctions.