Confusion swirled over a possible breakthrough in the tanker standoff in the Middle East on Tuesday after Gibraltar scotched Iranian media reports that an Iranian tanker was due to be released.

The Fars news agency said that Grace 1, seized by British Royal Marines off Gibraltar on suspicion that it was taking 2.1m barrels of oil to Syria in breach of an EU arms embargo, was going to be released on Tuesday evening. The report cited Gibraltar authorities, but a source for the government of the British Mediterranean territory told Reuters it was not correct.

The seizure of the boat on 4 July led to reprisals by Iran, including the capture of the British-flagged Stena Impero. Both incidents fuelled worsening hostilities between Iran and the west that began when Washington pulled out of an international agreement curbing Iran’s nuclear programme last year and reimposed economic sanctions.

A court in Gibraltar is to decide the fate of the ship on Thursday, when an order for its detention lapses. Britain had said there would be serious consequences if Iran did not release the British-flagged tanker, and behind the scenes there have been negotiations on how to resolve the dual crisis. Formally, the Foreign Office and Iran say there is no link between the two boat seizures. On Tuesday the Foreign Office said the ship’s status was a matter for Gibraltar. The Stena Impero’s owners have said its 23 personnel on board have been properly treated by the Iranians since their capture. (TheGuardian)…[+]