A light sheen of oil has been seen leaking from the engine room of the Hafnia product tanker involved in a collision with a Chinese-controlled VLCC.

The 74,200-dwt Hafnia Nile (built 2017) was severely damaged when it caught fire after the collision on 19 July with the Shanghai Prosperity Ship Management-operated 300,000-dwt Ceres I (built 2001) close to the entrance of the Singapore Strait.

The leak was discovered after a post-fire assessment of the Hafnia Nile that revealed the damage to the engine room.

“Inspections have confirmed a light oil sheen which is seen emanating from the damaged area,” Hafnia said.

The Hafnia Nile remains connected to tugs within Malaysian waters and a salvage team has transferred equipment from one of them to contain any localised seepage of oil, said Hafnia, which is working with Malaysian and Singaporean authorities to develop a safe towage plan for the tanker and find a place for repairs and to transfer its naphtha cargo.

Malaysian authorities have started an investigation into the incident and will coordinate the management of any spill, said officials.

Singapore, as the flag state of the Hafnia Nile, has launched its own investigation.

A fire that started on the Sao Tome & Principe-flagged Ceres I has also been put out and all the crew members are accounted for.

The tanker, which is suspected to have hauled sanctioned Iranian and Venezuelan cargoes in the past, switched off its AIS transponders at the weekend as two tugs tried to tow it away.

Malaysian authorities later found the vessel under tow within its territorial waters. The tanker and its tugs were subsequently seized.

TradeWinds has sought comment from Shanghai Prosperity Ship Management, but a person who answered a phone linked to the company immediately disconnected the call.