Beijing: Rescue crews have scrambled to bring a blaze on an Iranian oil tanker off China's coast under control as fire raged for a second day after a collision with a grain ship, while the US Navy joined the search for 32 missing crew.

Concerns were growing that the tanker, which hit a freight ship on Saturday night in the East China Sea, may explode and sink as the inferno grew, the official China Central Television (CCTV) said on Monday, citing experts on the rescue team.

The extent of the environmental harm and size of the oil spill from the ship were not known, but the disaster has the potential to be the worst since 1991 when 260,000 tonnes of oil leaked off the Angolan coast.

The US Navy sent a military aircraft to assist with the search, which spanned an area of about 3,600 square nautical miles, but said in a statement it did not locate any of the tanker's missing crew members.

As of 8am local time, the search team had not found any of the missing mariners, CCTV said.

The Sanchi tanker run by Iran's top oil shipping operator, collided with the CF Crystal about 160 nautical miles off China's coast near Shanghai and the mouth of the Yangtze River Delta on Saturday evening.

Chinese state media CCTV showed footage on Monday of a flotilla of boats battling flames as plumes of thick dark smoke continued to billow from the tanker.

China sent four rescue ships and three cleaning boats to the site, while South Korea dispatched a ship and a helicopter.

The Panama-registered tanker was sailing from Iran to South Korea, carrying 136,000 tonnes of condensate, an ultra light crude. That is equivalent to just under 1 million barrels, worth about $US60 million ($84 million), based on global crude oil prices.

The freight ship, which was carrying US grain, suffered limited damage and the 21 crew members, all Chinese nationals, were rescued.

Thick clouds of dark smoke could be seen billowing out of the Sanchi tanker , engulfing the vessel as rescue efforts were hampered by bad weather and fire on and around the ship, Mohammad Rastad, head of Iran's Ports and Maritime Organisation, told Iranian television. }ks7309492494>

"Sanchi is floating and burning as of now," the ministry said. "There is an oil slick and we are pushing forward with rescue efforts."

State media CCTV showed pictures of the tanker ablaze and billowing plumes of thick dark smoke.

It had sent four rescue ships and three cleaning boats to the site by 9am local time on on Sunday, it added.

South Korea also sent a ship and helicopter to help. A Korean Coast Guard official confirmed the tanker was still raging at 1pm local time.  

The tanker's 32 crew members were all Iranian nationals except for two Bangladeshi nationals, the Chinese transport ministry said.

"There is a wide perimeter of flames around the vessel because of the spillage and search and rescue efforts are being carried out with difficulty," Rastad said.

"Unfortunately, up to this moment, there is no news of the crew," he said.

It was not immediately clear how much environmental damage had been caused or the volume of oil spilled into the sea.

The last major oil tanker disaster was the sinking of the Prestige off Spain in November 2002, which caused one of Europe's worst environmental catastrophes.

About 63,000 tonnes of fuel oil – around half the load on the Sanchi – leaked into the Atlantic, damaging beaches in France, Spain and Portugal and forcing the closure of Spain's richest fishing grounds.

The incident marked the first major maritime incident involving an Iranian tanker since the lifting of international sanctions on Iran in January 2016.

There was a collision involving an NITC-operated supertanker in the Singapore Strait in August 2016, but there was no loss of life or pollution.

The Chinese government gave no details of the size of the spill. The Foreign Ministry said in a separate statement that the cause of the incident was under investigation.

Reuters ship tracking data shows Sanchi was built in 2008 and was managed by the National Iranian Tanker Co (NITC). Its registered owner is Bright Shipping Ltd.

It was due to arrive at Daesan in South Korea from Kharg Island in Iran on Sunday.

Sanchi , leased by Hanwha Total Petrochemical Co Ltd, had "valid foreign insurance", Iranian oil ministry spokesman Kasra Nouri told Iran's state television.

Hanwha Total was not immediately available for comment.

CF Crystal, registered in Hong Kong, was carrying 64,000 tonnes of grain from the United States to China's southern province of Guangdong, the government said.

That ship, which was built in 2011, was due to arrive in China on January 10, according to Reuters ship tracking data.

Reuters