Oil tanker captains are being offered over $100,000, plus bonuses, to cross Hormuz

Oil tanker captains transiting through the Strait of Hormuz are being paid rates equivalent to $100,000 a month, along with a whooping $50,000 bonus for each trip, according to a report by Financial Times.

As Iran steps up attacks on vessels in the Gulf, shipowners are offering the amount to persuade seafarers to stay on vessels as Gulf countries try to keep crude oil flowing through the crucial waterway, three people close to tanker owners and crew told the publication.

The bumper fees, referred to as “danger money” is almost double the pay for regular sailors, whose normal monthly salaries can start as low as $1,500, and their captains, whose regular pay is about $15,000 a month while they are in the southern Red Sea and Gulf of Oman.


Shipowners are raising their paycheque further for each Hormuz journey, with ordinary sailors receiving at least four to six times their normal rates.

According to the report, sailors can earn the higher rates for months at a time while taking up the constant risk of Iranian missile and drone attacks on oil vessels as most trips through the strait are made by dedicated tankers on regular “shuttle runs”.

One person cited above said some seafarers are “almost being viewed as mercenaries”, reflecting the level of danger of sailing through the strait. Ships sailing through Hormuz are facing one of the heaviest periods of assaults since the US and Israeli attacks on Iran triggered the Middle East war in February.

According to maritime security company Vanguard, at least 14 attacks have taken place in the last 20 days, including four vessels struck since Saturday.

Alongside paycheques, freight rates for cargoes being carried through Hormuz have reached a record of $1.3mn per day this week, compared with about $20,000 to $50,000 per day last year, according to FT.

But high prices paid for crude that makes it out of the strait, and the risks associated with being unable to ship oil produced in the Gulf, mean that producers in the region are prepared to pay elevated rates for transit.

Producers in the region seem prepared to pay the elevated rates for transit.

Sailing into the Gulf, loading oil and returning typically takes about four days. Only a limited number of ships are willing to make the journey, transporting oil in and out of the Gulf to other tankers waiting off Fujairah in the Gulf of Oman, which then carry the cargo to its final destination.

A typical supertanker can carry about 2 million barrels of oil and has a crew of up to 35 seafarers, led by a captain, or master, according to the FT report.

Manoj Yadav, secretary-general of the Forward Seamen’s Union of India, told the FT that shipowners were offering some seafarers significantly higher pay to undertake the voyages. In some cases, he said, owners were also pressuring unwilling crew members to sail by warning that they could be replaced if they refused, with repatriation costs deducted from their wages.

At least 93 ships have been hit since February 28, while 24 sailors have been killed, according to data from the International Maritime Organization cited by the FT.

“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 of cargo shipping company Oldendorff Carriers, told a UK shipping conference on Tuesday.

Most vessels are now passing through the Strait of Hormuz at night, with their GPS signalling systems switched off. The US Navy has deployed defensive air capabilities to provide cover for ships using a route close to the Omani coast.

Maritime analyst Windward estimated that 13 vessels crossed the strait on October 4, down from 24 on the same day a week earlier following an increase in strikes. Windward data showed that about 2% of vessels passing through Hormuz in the third quarter were hit, the FT reported.

Before the conflict, around 135 vessels crossed the strait each day, carrying roughly a fifth of the world's oil and liquefied natural gas supplies.

The rise in attacks over the past week came after reports that overall oil flows from the Gulf had recovered close to pre-conflict levels, according to commodities platform Kpler. However, oil flows through the Strait of Hormuz remained about one-third below prewar levels on Tuesday, Kpler said, with some volumes redirected through alternative routes such as pipelines.

Tanker owners are also facing sharply higher costs. War-risk insurance for vessels operating in the region is running at 6% to 10% of the ship's hull value, according to insurance brokers cited by the FT. For a supertanker, that could mean as much as $20 million in war insurance for a single voyage into the Gulf.

Fuel prices have also risen.

The price of the fuel oil typically used by supertankers at Fujairah, the nearest refuelling port to the Gulf, stood at $686 per tonne on Monday, according to price-reporting agency Argus. That was 67% higher than at the same time last year, adding further to the cost of the voyage.

Many seafarers come from poorer communities in countries including the Philippines, India and Indonesia, as well as Russia, Ukraine and eastern Europe. They are often drawn to the demanding profession because maritime wages are significantly higher than what they could earn in their home countries.

“Seafarers are losing from everywhere. If they won’t agree, they may lose their job. If they agree, they may lose their life,” Yadav told the FT.

Companies sending vessels through the strait include South Korea's Sinokor and Greece's Dynacom, along with Middle Eastern state-owned companies such as Abu Dhabi's oil and gas company Adnoc, which operates its own shipping division, and Kuwait Oil Tanker Company.