A Japanese tanker travelling from the Middle East to Japan spilled about 4,500 tonnes of crude oil in the Indian Ocean, according to its operator.
The spill happened around 290 miles (470 km) off India's Great Nicobar Island when the tanker went to assist another vessel.
It was rescuing crew from a ship on fire and damaged its oil tanks when the two ships hit, Mitsui O.S.K. said.
The spill was contained and there was no danger of further leaks.
The spill was the largest involving a Japanese-operated tanker, Mitsui said.
But environmental impact would be limited because the collision occurred out to sea and the oil should disperse naturally.
There were no reports of injuries from the accident, which occurred on Monday.
Great Nicobar is the southernmost of India's Andaman and Nicobar Islands. Indian and Singaporean authorities had been informed of the leak, the company said.