The British territory of Gibraltar will not yet release an Iranian oil tanker seized by Royal Marines in the Mediterranean despite an Iranian report that it could do so on Tuesday, an official Gibraltar source said.

The commandeering of the Grace 1 on July 4 exacerbated frictions between Tehran and the West and led to retaliatory moves in Gulf waterways used to ship oil.

Britain accused the vessel of violating European sanctions by taking oil to Syria, a charge Tehran denies.