The derailment of the oil train of 13 tankers crippled the rail service from Chiang Mai to Bangkok as all the oil tankers ran out and blocked the tracks.
State Railway of Thailand (SRT) official said it would take several hours before the tracks are cleared of the ruptured tankers that spilled thousands of litres of diesel into the area.
Passengers can now refund train tickets at Bangkok railway station.
The oil train was on its way to deliver diesel oil and cement to PTT oil depot in Chiang Mai from Saraburi.
However the train derailed at Nonglom railway station in Lamphun.
After the trail derailed and some of the ruptured oil tankers were leaking oil, railway officials and local police were alerted and the area was sealed off to prevent villagers near the scene to snatch the oil and to prevent the oil to catch fire.
It was not immediately known what caused the oil train to derail, but a train employee said there was a sound of explosion and the train then ran off the tracks.
Latest report said railway officials assured the train service could be resumed at 5 pm today.