Sea smoke, or arctic steam fog, is a cloud

Cloud

A cloud is a visible mass of liquid droplets or frozen crystals made of water and/or various chemicals suspended in the atmosphere above the surface of a planetary body. They are also known as aerosols. Clouds in Earth's atmosphere are studied in the cloud physics branch of meteorology...

 over the sea

Sea

A sea generally refers to a large body of salt water, but the term is used in other contexts as well. Most commonly, it means a large expanse of saline water connected with an ocean, and is commonly used as a synonym for ocean...

, which could otherwise be called fog

Fog

Fog is a collection of water droplets or ice crystals suspended in the air at or near the Earth's surface. While fog is a type of stratus cloud, the term "fog" is typically distinguished from the more generic term "cloud" in that fog is low-lying, and the moisture in the fog is often generated...

, and is usually formed when very cold air moves over warmer water

Water

Water is a chemical substance with the chemical formula H2O. A water molecule contains one oxygen and two hydrogen atoms connected by covalent bonds. Water is a liquid at ambient conditions, but it often co-exists on Earth with its solid state, ice, and gaseous state . Water also exists in a...

. The physics are in principle similar to lake-effect snow.

Evaporation from exposed water surface depends upon its vapor pressure. If the water temperature is greater than that of the nearby air, the evaporation continues faster than the air can absorb the water vapor, even though the cool air's relative humidity is 100%. This further evaporates immediately and re-condenses as visible fog, which rises up in convective currents. If the wind blows across cold icy areas like the Arctic, the breaks in the ice sheets where clear water is exposed, the water surface steams up into the air, producing fog.

The conditions required for such fog formation include not only low surface temperature but also a preexisting surface inversion of temperature to inhibit the rapid development of instability.