The Iranian oil tanker exploded and burst into flames after the collision with a Chinese cargo vessel about 160 nautical miles off the coast of Shanghai.
The Panama-registered tanker Sanchi was carrying 136,000 tonnes of light crude oil which is now spilling into the sea.
China’s the Ministry of Transportation said it was sailing from Iran to South Korea when it collided with the CF Crystal 160 nautical miles off the coast of Shanghai.
A ministry spokesman confirmed the tanker’s 32 crew members were missing.
He said: “Sanchi is floating and burning as of now.
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“There is an oil slick and we are pushing forward with rescue efforts.”
The spokesman said China had sent four rescue ships and three cleaning boats to site.
South Korea has also sent a ship and helicopter to help.
State media showed pictures of the tanker ablaze and billowing plumes of thick dark smoke.
The government gave no details of the size of the spill.
Sanchi was built in 2008 and is managed by the National Iranian Tanker Co (NITC).
It was due to arrive at Daesan in South Korea from Kharg Island in Iran today.
CF Crystal, registered in Hong Kong, was carrying 64,000 tonnes of grain from the US to China’s southern province of Guangdong.
CF Crystal’s 21 crew members, all Chinese nationals, have been rescued and the vessel, which was built in 2011, suffered “non-critical” damage.