The 81,000-dwt Marathassa handed over to its Greek owner by Japan Marine United on 16 March this year has been boomed on the orders of the Canadian coast guard.
A kilometre long slick of black oil is reported in English Bay with local media reporting fears the pollution may be toxic.
The source of the spill is still being investigated, but the Marathassa laden with a grain cargo is suspected of being involved.
Coast guard officials said the the oil believed to be crude or bunker fuel had not come ashore but some tar balls had reached beaches.
“I can't definitively say that it came from that vessel. What I do know is that when we boomed it there was no more emergent oil,” Canadian coast guard official, Roger Girouard told local media.
The master of the Marathassa has denied that any oil has leaked from the vessel. Officials said the shipowner was co-operating with the investigation.
Contractors have so far recovered 1,400 litres of oil.
The Marathassa is part of the fleet of Nicolas Hadjioannou’s Alassia Newships and has protection and indemnity cover from the Standard Club.
The Standard Club issued the vessel's bunker convention 'blue card' guaranteeing that compensation is available for any pollution.
