Fujairah's most popular beach had to close when oil washed ashore and covered the sand in black sludge.
The spill on Al Aqah beach on Sunday forced some hotels to close their facilities.
"Our staff saw a big oil slick along the shores on Sunday morning coming out of the water and covering the sand," said Hannah Baker, an instructor at Divers Down at the Miramar Beach Resort Hotel.
The water appeared clearer on Monday but patches of sticky tar could be seen stretching along the beach.
Municipality workers were seen attempting to clear up the oil.
Ms Baker took divers out on Sunday and said oil was seen floating about a kilometre offshore.
“We were still seeing the oil patches on the surface of the water, so divers had to look for gaps in between the slicks to surface to avoid the sticky oil,” she said.
“On Monday, the water became clear and divers didn’t face any issues. All of our clients were informed about the situation to give them the opportunity to reschedule if they don’t want to dive."
Dibba beach – about eight kilometres to the north – was also hit by the spill.
Black oil could be seen on rocks and stones on the shore.
Two years ago, a spate of oil spills was blamed on tankers dumping crude-laden ballast water offshore.
Captains are banned from doing so within Emirati territorial waters, 12 nautical miles off the coast.
But the oil washes up on Fujairah's beaches whether it is dumped within or outside the border, fishermen said.
Speaking at the time, fishermen blamed tanker captains and urged the authorities to act.
"They make use of the dark and while no one is watching. They wash away the oil into the sea and they should be punished for this criminal act that affects wildlife and humans," said Emirati Ahmad Darwish, 41.
Diving instructor Ms Baker said local businesses hope the spill is an isolated incident.
“It surely affects visibility underwater and cause harm to the marine life and local corals,” said Ms Baker.
"All the diving trips were cancelled Monday to Friday last week due to the unstable weather and according to the weather forecast we expect to cancel more trips this week too," she said, referring to Cyclone Maha, which is approaching the Emirates and Oman.