A towing vessel struck a dock and spilled around 5,000 gallons of low-sulfur diesel fuel into the Intracoastal Waterway in Texas.
The Capt Jim Green allided with the dock at a Subsea 7 facility near Port Isabel in South Padre Island.
The US Coast Guard (USCG) said the source of the spill was contained and there were no injuries reported. Oil recovery operations were ongoing on Wednesday.
There were no early reports of environmental or wildlife damage but USCG would continue monitoring and assessing the environmental impact.
The Intracoastal Waterway is a 3,000-mile inland waterway along the Atlantic and Gulf of Mexico coasts of the US. It stretches from Boston, Massachusetts to Brownsville, Texas.