An official in Iran's Oil Ministry, who spoke to the Associated Press on condition of anonymity, said 30 of the tanker's 32 crew members were Iranians.
The Sanchi tanker, registered in Panama, collided with the CF Crystal about 160 nautical miles off the coast near Shanghai on Saturday, the Ministry of Transportation said in statement.
Thousands of tons of oil are at risk of pouring into the sea off the coast of China after a tanker collided with a freighter.
The 32 missing crew members were all from the Iranian tanker Sanchi, carrying 136,000 tonnes of oil the time of the crash.
The Sanchi was carrying 150,000 tons, or almost 1 million barrels of condensate, a type of ultra-light oil, according to Chinese authorities. The South Korean coast guard also sent a ship and a plane to help search for the missing crew members - 30 Iranians and two Bangladeshis.
The official said the tanker had been rented by a South Korean company and was on its way to South Korea. The ministry said oil spilled into the sea, but did not specify the area of contamination.
State media CCTV showed pictures of the tanker ablaze and billowing plumes of thick dark smoke.
The AP reports that this is the second collision for the National Iranian Tanker Company in less than two years.
The Panamanian-flagged oil tanker Sanchi was being operated by Iran's Glory Shipping.
The Sanchi tanker, leased by Hanwha Total Petrochemical Co Ltd, had "valid foreign insurance", Iranian oil ministry spokesman Kasra Nouri told Iran's state television.
The Iranian tanker, Sanchi, is ablaze and leaking oil after colliding with the Hong Kong-registered vessel CF Crystal.
CF Crystal, which was built in 2011, suffered "non-critical" damage, China's transport ministry said.