Shipping companies warned Friday that the haze emanating from forest fires in Indonesia could lead to accidents in the busy Malacca and Singapore straits, risking a potentially devastating oil spill.

The Singapore Shipping Association (SSA) said more than 140 ships, including oil tankers and passenger ferries, navigate the narrow waterways on any given day and reduced visibility due to the smog has made conditions dangerous.

"The SSA is gravely concerned with the effects of the worsening hazy conditions on the safe navigation of ships through the Straits of Malacca and Singapore," it said.

Daniel Tan, the trade body's executive director, said the Malacca and Singapore straits are among the busiest and narrowest shipping lanes in the world.

"Reduced visibility in such heavy shipping traffic will definitely affect the safe navigation of ships in the straits," Tan said in a statement.

"In the event of any unfortunate accident, human lives and the marine environment will be at risk, especially if it involves a fully laden VLCC (very large crude carriers)," he warned.

"The oil spillage from the tanker can have serious consequences not only on the marine life in the straits but also affect the livelihood of fishermen and those who depend on the tourist industry."

Smog from the forest fires in Indonesia's Sumatra island caused by slash-and-burn land-clearing activities has blanketed Singapore, parts of Malaysia and the straits this week.

In Singapore, the pollution index reached a historic high of 401 at midday Friday as thick grey smog surrounded skyscrapers, crept through homes and shrouded streets for a fifth day running.

Massive oil tankers, container ships, cruise liners as well as smaller crafts like passenger ferries, tugs and barges ply the straits daily. Many of the ships pass through Singapore, a global bunkering centre and one of the world's busiest ports.

While ship captains are trained to navigate through foggy and stormy weather, transiting through the waterways "can be very challenging and dangerous especially under extreme smoky conditions," the SSA said.