Shark vessel circling bad fog (7)
I believe the answer is:
dogfish
'shark' is the definition.
(I know that dogfish is a type of shark)
'vessel circling bad fog' is the wordplay.
'vessel' becomes 'dish' ().
'circling' means one lot of letters goes inside another (circling can mean going around or containing).
'bad' indicates anagramming the letters.
'fog' is an anagram of 'ogf'.
'dish' enclosing 'ogf' is 'DOGFISH'.
(Other definitions for dogfish that I've seen before include "Small, edible shark" , "'Small shark, sounds canine (7)'" , "Nursehound" , "Restaurants call it rock salmon" .)