The Sanchi was carrying almost one million barrels of condensate - a type of gassy, ultra-light oil - when it collided on Saturday evening with a freighter 160 miles from Shanghai and caught fire.
The ship, the Panama-registered Sanchi tanker, was carrying Iran-produced condensate, a highly flammable ultra-light crude, to deliver to South Korea when it collided with a Chinese freight ship in the East China Sea, on Saturday January 9, 2018. The ministry official said authorities suspect the tanker caught fire as soon as it hit the freighter carrying grain.
"Spilled oil covering the ship body and its surrounding water is still burning, which leaves Sanchi at risk of exploding and sinking", said the MOT in the statement.
Photos on the Chinese Ministry of Transportation's microblog showed thick black smoke pouring from the ship on Thursday morning.
The explosion on the Sanchi's bow was the latest setback in the multinational effort to extinguish the blaze and forced rescue vessels to move to a safe distance, China's Ministry of Transport said.
Harsh weather conditions have reportedly hindered the rescue effort with strong winds, high waves and toxic gases stopping rescue boats from locating missing sailors.
Even after parts of it exploded, and while it's still on fire, an Iranian diplomat said Thursday the crew on the oil tanker Sanchi may yet be alive.
Experts are especially anxious because the ship is carrying condensate, an ultralight version of crude oil.
South Korean authorities have said that the flames could last for up to a month given the consequences of previous oil spills.
If that happens, it would potentially expel the tanker's bunker fuel, or the heavy fuel oil that powers a ship's engines. Sailors from CF Crystal were rescued by a passing Chinese fishing boat on the night of the incident.