Tanker captains earn $100,000 a month to run the Strait of Hormuz gauntlet

Tanker captains willing to steer their ships through the Strait of Hormuz are now being paid the equivalent of $100,000 a month — nearly seven times their normal salary of around $15,000 — plus a $50,000 bonus for every single crossing, according to three people close to tanker owners and crews who spoke to the Financial Times.

The figures lay bare the economics of one of the world's most dangerous shipping corridors. Ordinary deckhands and oilers, whose standard monthly pay can start as low as $1,500, are receiving four to six times their normal rates during Hormuz transits. One Chinese crewing agency is offering a $25,000 per-trip bonus even for oilers and ordinary seamen, according to the Wall Street Journal. Because most journeys are made by dedicated tankers on regular shuttle runs — loading crude in the Gulf and ferrying it to larger vessels waiting off Fujairah in the Gulf of Oman — crew members can collect these elevated rates for months at a time.

The danger money is being offered against a backdrop of intensifying Iranian missile and drone attacks on shipping. At least 93 vessels have been struck since February 28, when the current conflict began, and 24 seafarers have been killed, according to International Maritime Organization data cited by the FT. Maritime security firm Vanguard counted at least 14 attacks in just the 20 days before early October. The pace has been severe enough to nearly halve daily traffic: shipping analytics firm Windward recorded 13 vessels crossing the strait on October 4, down from 24 on the same day the previous week. Before the conflict, roughly 135 ships transited each day, carrying about one-fifth of the world's crude oil and liquefied natural gas.

The money on offer is substantial by any measure, but it is dwarfed by what shipowners themselves are making. The Wall Street Journal put the revenue from a single Hormuz shuttle run at $40 million per trip. Freight charter rates for cargoes transiting the strait hit a record $1.3 million per day this week, according to the FT — up from $20,000 to $50,000 per day last year, a rise of more than 26 times. Gulf oil producers appear willing to absorb those costs because the losses from failing to export their crude would be even greater.

Given the millions being made at the moment, [bonuses are] absolutely nothing to the shipowners.— Richard Matthews, consulting director, E.A. Gibson

Owners are also carrying sharply higher costs of their own. War-risk insurance for vessels operating in the region is running at 6% to 10% of a ship's hull value, according to insurance brokers cited by the FT — meaning a single voyage by a supertanker can attract as much as $20 million in war insurance alone. Fuel costs have also surged: the fuel oil used by supertankers at Fujairah stood at $686 per tonne on Monday, 67% higher than a year earlier, according to price-reporting agency Argus.

The danger is real, if not yet routinely fatal. Iran has not sunk a tanker during the crisis, and maritime-executive.com notes that most hits have not injured crew or disabled vessels — though a recent uptick in serious incidents is changing the calculus. An LR2 tanker was struck off the Omani coast during an outbound transit earlier this week, injuring 12 seafarers and requiring a medevac. Ships are now routinely transiting at night with GPS transponders switched off; the US Navy has deployed defensive air capabilities along a route close to the Omani coast.

The pay packages have drawn scrutiny over whether seafarers are genuinely free to refuse. Manoj Yadav, secretary-general of the Forward Seamen's Union of India, told the FT that while some owners are offering large sums to reluctant crew, others are warning that those who decline could be replaced, with repatriation costs deducted from their wages. One person familiar with the industry told the FT that some seafarers are 'almost being viewed as mercenaries.'

Seafarers are losing from everywhere. If they won't agree, they may lose their job. If they agree, they may lose their life.— Manoj Yadav, secretary-general, Forward Seamen's Union of India

Many of the seafarers taking on these voyages come from the Philippines, India, Indonesia, Russia, Ukraine, and eastern Europe — countries where maritime wages are already significantly higher than onshore alternatives, making the financial pressure to accept dangerous assignments particularly acute.

The reality is that these ships and our seafarers are targets . . . It's shameful but it is also a new reality and it is making the lives of those we rely on very, very difficult.— Scott Bergeron, executive director, Oldendorff Carriers

Companies still sending vessels through the strait include South Korea's Sinokor, Greece's Dynacom, and Middle Eastern state-owned operators including Abu Dhabi's Adnoc shipping division and Kuwait Oil Tanker Company. By contrast, Chinese state-owned giants COSCO and China Merchants Energy Shipping stopped sending tankers through Hormuz in August, instead taking delivery of oil cargoes outside the Persian Gulf. The two companies together control more than 100 Very Large Crude Carrier supertankers and previously handled roughly half of all crude arriving in China from the Middle East, according to globalhappenings.com.

Oil flows through the Strait of Hormuz remain about one-third below pre-war levels, according to commodities platform Kpler, with some volumes redirected through alternative pipelines. Overall Gulf oil flows had recovered close to pre-conflict levels before the latest surge in attacks, Kpler said — suggesting the renewed assault is specifically targeting the strait as a chokepoint.

Why it matters — The Strait of Hormuz carries roughly one-fifth of the world's oil and gas, and the collapse in daily transits — combined with record freight rates and mounting crew casualties — signals that the conflict's disruption to global energy supply is deepening, with costs now falling visibly on the seafarers who keep the oil moving.

Reported by firstpost.com, newsbytesapp.com, maritime-executive.com, finance.biggo.com, biz.chosun.com, globalhappenings.com, benzinga.com, economictimes.indiatimes.com