The Iranian tanker carrying condensates collided with a Chinese freight ship in East China coast last Saturday, and its 32 crew members, 30 Iranians and two from Bangladesh, went missing.
The stricken tanker, Sanchi, had drifted into Japan's exclusive economic zone and "suddenly ignited", reports said. The ship sank before 5 p.m. (4 a.m. EST), CCTV said. The tanker was carrying 136,000 tonnes of ultra-light crude but Chinese officials say there is no major slick.
There are 13 vessels near where the collision took place, including two Japanese ships and a South Korean one.
"Despite our efforts, it has not been possible to extinguish the fire and recover the bodies due to repeated explosions and gas leaks", Mohammad Rastad, head of Iran's Ports and Maritime Organization, said.
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The ship has been ablaze for nearly a week since it collided with another vessel on January 6 in the East China Sea and has been drifting into Japanese economic zone over the past several days.
All 21 Chinese crew members of the Crystal, which was carrying grain from the United States, have been rescued.
The body of a mariner suspected to be from the ship was recovered on Monday and sent to Shanghai for identification.
The network said rescuers were prevented from entering the crew living quarters by temperatures as high as 192 degrees.