Iran seized the Stena Impero in the strategic Strait of Hormuz (Picture: Stena Bulk).
The Prime Minister has been chairing the Government's emergency committee COBRA after Iran seized a British-flagged oil tanker in the Gulf.
Theresa May, who was not present at the COBRA meetings over the weekend, has been receiving updates from ministers and officials on the situation and will discuss the maintenance of the security of shipping in the region.
Foreign Secretary Jeremy Hunt said the UK will be seeking to put together a European-led maritime protection mission in the Gulf.
In a Commons statement, he said:
"We will seek to put together a European-led maritime protection mission to support safe passage of crew and cargo in this vital region.
"We have had a constructive discussion with a number of countries in the last 48 hours and we will discuss later this week the best way to complement this with recent US proposals in this area."
Mr Hunt further announced that HMS Duncan has been dispatched to takeover from HMS Montrose and will be in the region by Monday.
The Strait of Hormuz is one of the most important waterways in the world with nearly 19 million barrels of oil travelling through it every day.
Meanwhile, Chancellor Phillip Hammond has said the Government did not take its "eye off the ball" over the seizure.
Speaking to the BBC, Mr Hammond also said the UK has been working closely with the US and European allies in response to Iran's action.
A recording of radio exchanges between Iranian authorities and HMS Montrose moments before the Stena Impero was seized has now emerged.
In the radio recording, the Iranian vessel can be heard saying: "If you obey, you will be safe. Alter your course immediately. I want to inspect the ship for security reasons."
HMS Montrose replied: "You must not impair, impede, obstruct or hamper the passage of the Stena Impero. Please confirm that you are not intending to violate international law by attempting to board."
Listen: a recording of radio exchanges between HMS Montrose and Iranian authorities has emerged
Iran said the seizure is in retaliation for the boarding by Royal Marines of an Iranian ship off the coast of Gibraltar earlier this month.
Natasha Lindstaedt, a Middle East expert from Essex University, said "Iran is achieving exactly what it wants to achieve which is to sow chaos in the region":
"The Iranian feel that they have nothing to lose, it's a very bold risk-taking regime.
"It's a regime that has always engaged in hybrid warfare and we've seen that through the sabotage of different ships and by disrupting things in the Strait of Hormuz.
"It (Iran) knows how important and vital the Strait of Hormuz is, in terms of the world's oil supply."
Following the incident in the Strait of Hormuz, defence minister Tobias Ellwood has said the "Royal Navy is too small" and with UK vessels going through 100 nautical miles every day in the region, he said "it is impossible simply to escort each individual vessel".
A second British-owner tanker was also boarded by Iranian armed guards but was later released.