The USS John McCain was sailing east of Singapore and preparing to stop in the port when it struck the Liberian-flagged vessel.
A wide-ranging search and rescue operation is under way.
It is the second serious collision involving a US Navy ship in recent months.
The collision, which was reported at 05:24 local time on Monday (21:24 GMT on Sunday), happened as the USS John McCain prepared to perform a routine port stop.
Initial reports indicated that the ship had "sustained damage" to its port side, but the US Navy said it was now sailing under its own power and heading to Singapore's port,
US military helicopters as well as the Singapore navy and coast guard are conducting search and rescue efforts. Malaysia has also joined in the rescue effort
There are no details yet on the status of the oil tanker, the Alnic MC, and its crew. The tanker has a gross tonnage of 30,000, about three times that of USS John McCain.
US senator John McCain, whom the ship is named after, tweeted that he and his wife were praying for the sailors.
n June, seven US sailors were killed when the USS Fitzgerald collided with a container ship in Japanese waters near the port city of Yokosuka.
Those who died were found in flooded berths on board the ship after the collision caused a "big gash" under the warship's waterline, the US Navy said.
According to maritime rules, vessels are supposed to give way to ships on their starboard side.
http://www.bbc.com
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