Britain’s seizure of the Iranian tanker is a "clear case of piracy and violation of international law,” Majid Takht Ravanchi told the BBC on Wednesday.
"It is better for the British government to release this ship as soon as possible otherwise there will be consequences," he said.
Elsewhere in the interview, Takht Ravanchi said he did not think US President Donald Trump wanted a war with Iran but believed his National Security Adviser John Bolton did.
The ambassador said negotiations with the US could not take place unless the Trump administration lifted sanctions "at the least".
"For the time being we are in the deal and we invite others to stay in the deal," he said. But Iran would move to the "third phase" of its stepped-up uranium enrichment program unless the Europeans kept promises to uphold the economic benefits of the accord.
"Apparently, besides the US, the Europeans have not been up to the job and have not honored all their commitments up to now," he said.
Ravanchi said reports that Iran may dramatically raise levels of uranium enrichment to 20% purity in "phase 3" were hypothetical.
"We have said we are not going to honor the cap of 3.67%," the ambassador said.
"What will happen in the third phase we have not said it yet, but if we reach to that point, definitely we will announce beforehand."
Iran on Sunday declared the second step to reduce its commitments by ramping up the level of uranium enrichment to over 3.67 percent.
President Hassan Rouhani had warned on Wednesday that the second step of reduction in Iran’s commitments would take place on Sunday, saying, “On July 7, the level of (uranium) enrichment in Iran will not be 3.67 percent anymore, as we will abandon such a commitment and increase it (enrichment) to any amount that we need.”
Iran maintains that the new measures are not designed to harm the Joint Comprehensive Plan of Action (JCPOA), but to save the accord by creating a balance in the commitments.
Iran and the Group 5+1 (Russia, China, US, Britain, France, and Germany) on July 14, 2015, reached a conclusion over the text of the nuclear deal.
The accord took effect in January 2016 and was supposed to terminate all nuclear-related sanctions against Iran all at once, but its implementation was hampered by the US policies and its eventual withdrawal from the deal.
On May 8, 2018, Trump pulled his country out of the nuclear accord.
Following the US withdrawal, Iran and the remaining parties launched talks to save the deal.
However, the EU’s failure to ensure Iran’s economic interests forced Tehran to stop honoring certain commitments, including an unlimited rise in the stockpile of enriched uranium.
Last week, Iran’s stockpile of enriched uranium exceeded 300 kg.
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