This vessel can possibly be in wood (7)
I believe the answer is:
pinnace
'this vessel' is the definition.
(pinnace is a kind of vessel)
'can possibly be in wood' is the wordplay.
'possibly' indicates an anagram.
'be in' indicates putting letters inside.
'wood' becomes 'pine' (pine is a type of wood).
'can' anagrammed gives 'nac'.
'nac' going inside 'pine' is 'PINNACE'.
(Other definitions for pinnace that I've seen before include "Small boat" , "Ship's boat - nice nap (anag)" , "Vessel" , "tender" .)