AN explosion has rocked a stricken oil tanker off the coast of Shanghai, forcing maritime authorities to suspend firefighting and rescue efforts with more than two dozen sailors still missing.

China’s ministry of transport said rescue vessels withdrew to a safe distance after the explosion on the Sanchi’s bow - the latest setback in the multinational effort to extinguish the burning wreck and find more than 30 missing crew members.

The ship is still on fire, the ministry said.

Chinese officials have previously warned that the tanker could explode and sink, possibly triggering an environmental disaster.

The Sanchi was carrying nearly one million barrels of condensate, a type of gassy, ultra-light oil, when it collided on Saturday evening with a freighter 160 miles off the coast and caught fire.

The entire crew of the Panamanian-registered Sanchi - 30 Iranians and two Bangladeshis - went missing after its collision with the Chinese freighter CF Crystal.

The cause of the collision remains unclear.

The National Iranian Tanker Company, the Sanchi’s operator, said there is a chance that survivors were trapped in the ship’s engine room.

“Since the vessel’s engine room is not directly affected by the fire and is about 14 metres (46 feet) under water, there is still hope,” said NITC spokesman Mohsen Bahrami.