The intriguing role of the intracellular crowded environment in regulating protein aggregation remains elusive. The convolution of several factors such as the protein sequence-dependence, crowder's shape and size and diverse intermolecular interactions makes it complex to identify systematic trends. One of the ways to simplify the problem is to study a synthetic model for self-assembling proteins. In this study, we examine the aggregation behaviour of the cationic pseudoisocyanine chloride (PIC) dyestuff which is known to self-assemble and form fibril-like J-aggregates in aqueous solutions, similar to those formed by amyloid-forming proteins. Prior experimental studies have shown that polyethylene glycol impedes and Ficoll-400 promotes the self-assembly of PIC dyes. To achieve molecular insights, we examine the effect of crowding by ethylene glycol on the solvation thermodynamics of oligomerization of dyes into H-type and J-type oligomers using extensive molecular dynamics simulations. The binding free energy calculations show that the formation of J-oligomers is more favourable than that of H-oligomers in water. The stability of H- and J- tetramers and pentamers decreases in crowded solutions. The formation of oligomers is supported by the favourable change in dye-solvent interaction energy in both pure water and aqueous ethylene glycol solution although it is opposed by the reduced dye-solvent entropy. Ethylene glycol, as a molecular crowder, disfavours the H- as well as J-oligomerization via preferential binding to the dye oligomers. An unfavourable change in dye-crowder and dye-dye interaction energy on dye association makes the H-oligomer formation less favourable in crowded solution than in pure water solution. In the case of J-oligomers, however, the unfavourable change in dye-crowder interaction energy primarily contributes to making total dye-solvent energy unfavourable. The results are supported by isothermal titration calorimetry measurements where the binding of ethylene glycol to PIC molecules is found to be endothermic. The results provide an emerging view that a crowded environment can disfavour self-assembly of PIC dyes by interactions with the oligomeric states. The findings have implications in understanding the role of a crowded environment in shaping the free energy landscapes of proteins.