Tanker Captains Offered $100,000 A Month Plus Bonus To Transit Strait Of Hormuz

Oil tanker captains sailing through the Strait of Hormuz are being offered up to $100,000 a month, plus a $50,000 bonus for each crossing.

The high pay comes as shipowners try to keep Gulf oil moving through the strait despite attacks on commercial ships. The figures were reported by the Financial Times.

A tanker captain normally earns about $15,000 a month. Ordinary sailors can earn as little as $1,500 a month. Sailors working in the southern Red Sea and Gulf of Oman can get double their normal pay. Those crossing Hormuz can receive four to six times their usual wages.

The sharp rise in crew pay is part of a much bigger increase in the cost of moving oil through Hormuz. Freight rates for tanker cargoes travelling through the strait have reached about $1.3 million a day this week, compared with roughly $20,000 to $50,000 a day last year, according to the Financial Times.

Maritime security company Vanguard said there had been at least 14 attacks around Hormuz since September 20. Four vessels have been hit since Saturday, the Financial Times reported.

The International Maritime Organisation has recorded at least 93 ships being hit since the conflict began on February 28. Twenty-four seafarers have been killed, according to data cited by the Financial Times.

Most tanker voyages through Hormuz are regular shuttle operations, with dedicated ships making repeated trips through the strait. This means crews can receive the higher pay for months, but they also face the risk of repeated missile and drone attacks.

One person cited by the Financial Times said some seafarers were “almost being viewed as mercenaries” because of the risks involved.

A typical supertanker can carry about 2 million barrels of oil. It can have up to 35 crew members. A trip into the Gulf, including loading oil and sailing back out, usually takes about four days.

Only a limited number of ships are currently willing to make these trips. Some tankers are carrying crude to waters off Fujairah in the Gulf of Oman. The oil is then transferred to other tankers for the rest of the journey.

Manoj Yadav, secretary-general of the Forward Seamen’s Union of India, told the Financial Times that shipowners were offering much higher pay to crew members willing to make the trips.

He also said some crew members who did not want to enter the danger zone were being pressured to go. In some cases, they were warned they could be replaced if they refused. Repatriation costs could also be taken from their wages, he said.

Scott Bergeron, executive director of cargo shipping company Oldendorff Carriers, told a UK shipping conference that ships and their crews were being targeted.

Higher crew wages are not the only extra cost for shipowners.

War-risk insurance for tankers operating in the region has become much more expensive. Insurance brokers cited by the Financial Times said premiums were equal to 6% to 10% of a ship’s hull value.

For a supertanker, that could mean up to $20 million for a voyage into the Gulf.

Fuel is also costing more. Fuel oil used by supertankers at Fujairah reached $686 per tonne on Monday, according to Argus. That was 67% higher than a year earlier.

As a result, the cost of moving each oil cargo has risen before the cargo even reaches its final destination.

Producers in the region appear willing to pay the higher rates because of the value of the oil and the risks of being unable to move Gulf crude.

Windward estimated that 13 vessels crossed the strait on October 4. A week earlier, the number was 24.

Before the conflict, about 135 vessels crossed Hormuz each day. They carried around one-fifth of the world’s oil and liquefied natural gas supplies.

Most ships are now crossing at night. Their GPS signalling systems are being switched off.

The US Navy has also deployed defensive air capabilities near a route along the Omani coast.

Windward data showed that about 2% of vessels passing through Hormuz in the third quarter were hit, according to the Financial Times.

Even with fewer ships using the strait, Gulf oil exports have continued.

Kpler data cited by the Financial Times showed that overall oil flows from the Gulf had recovered close to pre-conflict levels. However, flows through the Strait of Hormuz were still about one-third below pre-war levels.

Some oil is being moved through pipelines and other routes.

References: Economictimes, Firstpost