The circle in this underwater photo is the entire sky, compressed by the refraction (bending) of the sun’s rays as they enter the water into a circle a little under 97 degrees across forming a cone of light. Skies underwater will always be perceived this way, from whatever depth you happen to look up. It was named after the Dutch astronomer Snellius, though another common descriptive is the ‘optical manhole’. The ragged edges mark where refraction turns into reflection from the waves of the Caribbean sea above. The effect is similar to that of a fisheye lens. The dark outside of the circle is due to the rays outside the circle reflecting rather than refracting from the point of view of the observer.
Image credit: David K. Lynch and Simon Higton via EPOD