Summary:
Key Points
- Shipowners pay captains $100,000 monthly plus $50,000 per Hormuz transit, according to people close to tanker owners.
- At least 93 ships have been hit since February 28 and 24 sailors killed, the IMO says.
- Gulf producers are absorbing record freight, insurance and fuel costs to keep crude moving out.
The latest:
Oil tanker captains crossing the Strait of Hormuz are being paid the equivalent of $100,000 a month, plus a $50,000 bonus for every transit, three people close to tanker owners and crew told the Financial Times. The danger money is meant to keep seafarers on board as Iranian missile and drone attacks intensify. Ordinary sailors are receiving at least four to six times their normal pay.
Details:
- The pay scale: Regular sailors earn monthly salaries starting as low as $1,500 and captains about $15,000, the FT reported. Crews receive double pay in the southern Red Sea and Gulf of Oman, then far higher multiples during each Hormuz transit, with the premium applying for months because dedicated tankers run repeated shuttle trips.
- The casualty toll: At least 93 ships have been struck since February 28 and 24 sailors killed, according to the International Maritime Organization. Maritime security firm Vanguard counted at least 14 attacks since September 20, including four vessels hit since Saturday, one of the heaviest stretches since the war began in February.
- Freight and insurance: Daily freight rates through the waterway hit a record $1.3mn this week, against roughly $20,000 to $50,000 a day last year. War-risk cover now runs at 6 to 10 per cent of hull value, brokers said, meaning a supertanker could pay up to $20mn in war insurance for one Gulf voyage.
- Fuel costs: Bunker prices reached fresh highs last week on supply concerns, according to price-reporting agency Argus. The fuel oil typically burned by supertankers was $686 per tonne at Fujairah on Monday, the nearest refuelling port to the Gulf, up 67 per cent from a year earlier.
- Traffic collapse: Analyst Windward estimated 13 vessels transited the strait on October 4, down from 24 on the same day the previous week. About 2 per cent of ships that sailed through Hormuz in the third quarter were hit. Before the conflict roughly 135 vessels crossed daily.
- Oil flows: Overall Gulf oil exports have returned close to pre-conflict levels, commodities platform Kpler said, but volumes through Hormuz itself remain about a third below prewar levels. Some barrels have been rerouted through pipelines. Kpler linked the renewed strikes to reports of that recovery.
- Crew pressure: Manoj Yadav, secretary-general of the Forward Seamen’s Union of India, said some owners are pressuring unwilling crew to sail, telling them they will be replaced if they refuse and that repatriation costs will be deducted from their wages. Most seafarers come from the Philippines, India, Indonesia, Russia, Ukraine and eastern Europe.
- Operating tactics: Most ships now cross Hormuz at night with GPS signalling equipment switched off, the FT reported. The US Navy has deployed defensive air capabilities covering a route close to the Omani coast. A round trip into the Gulf, loading and back out takes about four days, with only a handful of ships willing to shuttle oil to tankers waiting off Fujairah.
- Who is sailing: Companies still sending vessels through include South Korea’s Sinokor and Greece’s Dynacom, alongside state operators such as Abu Dhabi’s Adnoc, which runs its own shipping division, and Kuwait Oil Tanker Company. A typical supertanker carries about 2mn barrels with a crew of up to 35. Scott Bergeron of Oldendorff Carriers told a UK shipping conference that ships and seafarers are now “targets”.
Background:
The war began in February after US and Israeli strikes on Iran. Before the conflict, roughly a fifth of the world’s oil and liquefied natural gas supply passed through the Strait of Hormuz each day.
Between the lines:
The economics explain why ships keep sailing. With freight at $1.3mn a day and Gulf producers facing the alternative of stranded crude, a $20mn insurance bill and six-figure crew premiums remain worth paying. The burden falls on seafarers from low-income countries, whose choice, as Yadav framed it, is between losing a job and losing a life.
What’s next
Watch whether Windward’s daily transit count keeps falling below 13, whether Hormuz flows close the gap with the pre-war baseline Kpler tracks, and whether war-risk premiums push past 10 per cent of hull value.
