The development came as the local fishermen in the North have been protesting for over a week to stop the Indians from entering the Sri Lankan waters for fishing.
As many as 86 Indian fishermen have been arrested and their 10 fishing boats seized by the Sri Lanka Navy for allegedly poaching in the country's waters, naval officials said on Friday.
The Panama registered tanker New Diamond was carrying 270,000 metric tonnes of crude oil from Kuwait to India when its engine room caught fire off the coast of Sangamankanda in the eastern district of Ampara, Sri Lankan Navy spokesman Capt Indika Silva said.
21 fishermen were arrested and five boats were seized at Kankesanturai while 33 others on five boats were arrested at Talaimannar on Saturday night.