• The Stena Impero's owners have been unable to contact the ship, which was surrounded in the Strait of Hormuz.
• UK government said it was "deeply concerned" about Iran's "unacceptable" actions.
Iran may be choosing a "dangerous path" of "illegal and destabilising" behaviour after its authorities seized a British-flagged tanker in the Gulf, the foreign secretary has said.
The Stena Impero's owners have been unable to contact the ship, which was surrounded in the Strait of Hormuz.
The UK government said it was "deeply concerned" about Iran's "unacceptable" actions.
Iran said the vessel was "violating international maritime rules".
A second British-owned Liberian-flagged tanker, the MV Mesdar, was also boarded by armed guards but was released on Friday.
The Stena Impero was seized by the Iranian Revolutionary Guard on Friday in a key waterway in the Gulf.
The tanker was surrounded by four vessels and a helicopter before heading into Iranian waters, Mr Hunt said.
He said "freedom of navigation must be maintained" and warned of "serious consequences" if the situation is not resolved quickly.
"We are not looking at military options," he added. "We are looking at a diplomatic way to resolve this situation."
On Saturday, Mr Hunt tweeted: "Yesterday's action in Gulf shows worrying signs Iran may be choosing a dangerous path of illegal and destabilising behaviour after Gibraltar's legal detention of oil bound for Syria."
Iran's state-run IRNA news agency said the tanker was seized after it collided with a fishing boat and failed to respond to calls from the smaller craft.
The vessel's owners said it was fully complying with regulations and was in international waters when it was approached.
It said there no reported injuries among the 23 crew members, who are Indian, Russian, Latvian and Filipino.
A UK government spokeswoman told the BBC: "We have advised UK shipping to stay out of the area for an interim period."
What's the background to this?
The latest developments come amid a deterioration in relations between Iran and the UK and US.
Tensions between the US and Iran have risen sharply since April, when the US tightened sanctions it had reimposed on Iran after unilaterally withdrawing from a 2015 nuclear deal.
The US blamed Iran for attacks on tankers in the world's key shipping area since May. Tehran denies all the accusations.
Unlike the US, the UK government remains committed to the landmark nuclear deal, which curbs Iran's nuclear activities in return for the lifting of sanctions tensions.
However, the UK infuriated Iran after its Royal Marines helped seize an Iranian tanker off Gibraltar earlier this month.
On Friday, Gibraltar granted a 30-day extension to allow authorities to continue detaining the tanker, which was suspected of carrying oil to Syria in breach of EU sanctions.
In retaliation for the seizure of Grace 1, Iran threatened to seize a British oil tanker.
A week later, Iranian boats attempted to impede a British oil tanker in the region before being warned off by a Royal Navy ship, according to the Ministry of Defence. Iran denied any attempted seizure.
Since then, the threat level to British shipping in Iranian waters in the Gulf has remained at "critical".
A White House National Security Council spokesman said the latest incident was the second time in just over a week the UK had been "the target of escalatory violence" by Iran.
US President Donald Trump has responded to the developments by saying he would talk to the UK.
And US Central Command said it was developing a multinational maritime effort in response to the situation.
The US military said it wanted to promote maritime stability, ensure safe passage, and de-escalate tensions in international waters throughout the Arabian Gulf, Strait of Hormuz, the Bab el-Mandeb Strait and the Gulf of Oman.