Currently, oil slick detection at a large scale by remote sensing is widely concerned. However, oil-in-water, which is subject to seawater and chemical dispersant's physical process, can also harm marine environment and organisms. The upward radiance of seawater is the key signal of watercolor sensors, so finding the approaches to detecting oil-in-water by analyzing the feature of the upward radiance spectrum for oil-in-water waters is also significant for the marine ecosystems. A simulation, which parameters were from the ground-based measurement at Dalian Port, was made by Hydro light for the computation of the underwater light field of seawater, which contains oil-in-water. To reveal the feature of the upward radiance as a function of wavelength, water depth and zenith angle, and to analyze the effect of oil-in-water on the upward radiance spectra and its response spectra in seawater medium. The simulation shows that oil-in-water mainly affects the visible spectrum. The peak of the upward radiance spectrum shifts from 417.5 to 442.5~472.5 nm and the value of the radiance decreases as the content of oil-in-water increases. It is the primary spectrum basis for detecting oil-in-water by the ocean color remote sensing techniques, for these responses belong to the detection domain of watercolor remote sensing. Besides, the upward radiance curves decrease with increasing water depth, then increase near the bottom. It indicates that the upward radiance just above the sea surface is contributed by the backscattering of water components at depth, the reflection of the bottom and the upward transmission through the air-water surface, following the radiative transfer model. It is different from the detection mechanism of oil slicks by changing the reflection ratio of the nature sea surface. Furthermore, compared with seawater's upward radiance, which contains oil-in-water, the reflection of direct solar radiation is powerful enough to shield the upward radiance. The swing capability of satellite-borne ocean color sensors can exclude the direct solar reflection to sense the upward spectral signals of oil-in-water. Meanwhile, the high signal to noise ratio of ocean color sensors and the transit time of ocean color satellites from 10 am to 2 pm also meet the detection requirement of dark pixels for waters containing oil-in-water. This paper indicates the spectral basis and the radiative transfer mechanism to detect oil-in-water by ocean color remote sensing techniques. It shows that the oil-in-water can be regarded as a new water component to develop the remote sensing inversion model to retrieve oil-in-water by the radiative transfer procedure of light in water media.