Some 80 metric tonnes of bunker fuel spilled into the waters in the Singapore Strait, off Sebarok Island, after two vessels collided on Monday afternoon.
It was the third such collision resulting in an oil spillage this year, following two earlier incidents at the south of Jurong Island and off Marina South last month.
No one was injured in the latest collision, which took place about 10km south of mainland Singapore.
The Maritime and Port Authority of Singapore (MPA) said in a statement that it was informed of the collision between the departing Liberia-flagged container ship Hammonia Thracium and the Panama-flagged chemical tanker Zoey at 3.35pm.
Before the accident, MPA's Port Operations Control Centre had alerted Zoey that the vessel Hammonia Thracium was crossing the traffic lane.
Four patrol craft were deployed to deal with the spillage. Oil spill response companies have also been activated to support the clean-up, said MPA.
Hammonia Thracium said one of her bunker tanks was damaged, resulting in the spillage. The two vessels are in stable condition outside of Singapore's port limits. Port operations remain unaffected and MPA is investigating the cause of the collision.