The vessel has grounded on Nightingale Island, part of the Tristan da Cunha UK overseas territory in the South Atlantic, causing an oil slick around the island which is home to nearly half the world's population of northern rockhopper penguins.
Some 1,500 tons of heavy crude oil from the MS Olivia, which was shipping soya beans between Rio de Janeiro and Singapore, is leaking into the sea.
According to the RSPB, oil now surrounds Nightingale Island and extends into a slick eight miles offshore, threatening the endangered penguins and the economically important rock lobster fishery.
Hundreds of penguins have already been seen coming ashore covered in oil, the wildlife charity said.
The shipwreck could also lead to any rats onboard colonising the island and posing a huge risk to the native seabird populations - whose chicks and eggs could be eaten by the invasive rodents.
The Tristan da Cunha islands, in particular Nightingale and its neighbor Middle Island, are home to millions of nesting seabirds. There are more than 200,000 northern rockhopper penguins on the island.
RSPB research biologist Richard Cuthbert said: "The consequences of this wreck could be potentially disastrous for wildlife and the fishery-based economy of these remote islands.
"The Tristan da Cunha islands, especially Nightingale and adjacent Middle Island, hold millions of nesting seabirds as well as four out of every 10 of the world population of the globally endangered northern rockhopper penguin."And he said: "If the vessel happens to be harboring rats and they get ashore, then a twin environmental catastrophe could arise. Nightingale is one of two large islands in the Tristan da Cunha group that are rodent-free. If rats gain a foothold their impact would be devastating."
Trevor Glass, Tristan conservation officer, said: "The scene at Nightingale is dreadful as there is an oil slick encircling the island. The Tristan conservation team are doing all they can to clean up the penguins that are currently coming ashore. It is a disaster."
The Guardian,"Shipwreck threatens penguin colony on South Atlantic island",accessed March 31, 2011