British maritime agency says the incident caused one casualty and damaged the vessel's engine room.
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The UAE announced the embargo, accusing Iran of launching missiles into its territory.
Iraqi President Nizar Amidi says his country's territory will not be used to launch attacks against any other state.
US Treasury Secretary Scott Bessent says Washington aims to 'sever every economic lifeline' that sustains Iran.
Tehran says reopening Strait of Hormuz has been its main goal, while the US continues to focus on nuclear talks.
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