Iran said on Tuesday it had stepped up its uranium enrichment at a time of heightened tensions with the United States and after it seized a South Korean tanker in strategic Gulf waters.

Tehran said it was now refining uranium to 20 per cent purity — far above the level permitted under its 2015 agreement with world powers, but far below the 90 per cent required for an atomic bomb — in a step Washington condemned as "nuclear extortion".

The European Union noted Iran's step "with deep concern" and said it planned to "redouble our efforts to preserve the agreement and return to its full implementation by all parties".

It was the most striking suspension yet of Tehran’s commitments under its landmark deal with six nations, which has been fraying since US President Donald Trump withdrew from it in 2018 and reimposed crippling sanctions.

A war of words has flared again in the final weeks of Trump’s presidency and as Iran and its allies have marked one year since a US drone strike in Baghdad killed Iran’s most revered military commander, Qassem Soleimani.

Washington has meanwhile reversed an order to bring home its USS Nimitz aircraft carrier from the Gulf, citing "threats” against Trump, after recently also flying B-52 bombers over the region.

Iran’s Islamic Revolutionary Guard Corps has warned it is ready to respond to any attack.

‘Not hostage-takers’ 

On Monday, the Guards seized the South Korean-flagged Hankuk Chemi and arrested its multinational crew of 20 near the Strait of Hormuz, a chokepoint through which a fifth of world oil output passes, alleging the tanker had polluted the area’s waters.

South Korea has demanded the ship’s release and deployed a destroyer to the area — though with no plans to engage in an offensive operation, an unnamed military official told Yonhap News Agency.

Seoul said it would send a government delegation to Iran to negotiate the release of the vessel and its crew.

Iran’s move came after Tehran had urged Seoul to release billions of dollars of Iranian assets frozen in South Korea as part of the US sanctions.

"We are not hostage-takers,” said Iran’s government spokesman Ali Rabiei.

"It is the government of Korea that has taken over $7 billion of ours hostage on baseless grounds.”

South Korea’s vice foreign minister Choi Jong-kun plans to go ahead with a scheduled three-day trip to Tehran early next week, his office said.

Nuclear tensions 

Iran first announced on Monday it had stepped up the uranium enrichment process at its underground Fordo site, in a move confirmed by UN nuclear watchdog the IAEA.

"We can produce about eight to nine kilograms of 20 per cent enriched uranium so that we reach the 120 kilogrammes the law requests from us,” Ali Akbar Salehi, head of the Atomic Energy Organisation of Iran, said on Tuesday.

Iran’s conservative-dominated parliament voted for the step after the November killing of its top nuclear physicist Mohsen Fakhrizadeh, an assassination Iran blamed on Israel.

Israeli Prime Minister Benjamin Netanyahu has charged Iran’s latest nuclear move proved it is seeking to build an atomic bomb — a claim Iran has always strongly denied — and pledged Israel "will not allow” it to do so.

The US State Department labelled Iran’s stepped-up enrichment "a clear attempt to increase its campaign of nuclear extortion, an attempt that will continue to fail”.

Iranian President Hassan Rouhani’s government has signalled it is ready to engage with US President-elect Joe Biden, who has likewise expressed a willingness to return to diplomacy.

Biden, who takes office on January 20, was vice president to Barack Obama, whose administration had finalised the 2015 nuclear deal and hailed it as a landmark achievement.

Iran’s Foreign Minister Mohammad Javad Zarif said Tehran took the latest enrichment step "after years of non-compliance” by other parties and that "our measures are fully reversible upon full compliance by all”.

Russia’s foreign ministry said in a statement it "paid tribute to the regular declarations by Iranian leaders of their willingness to return to full respect for the requirements of the agreement”.

It added, however, that "additional efforts and costs will now be required to bring the Fordo site in line with the terms of the agreement”.