Seafarers Now Command Huge Bonuses for Hormuz Transits

Shipowners aren't the only ones making a fortune from million-dollar day rates for Hormuz transits. Far from being coerced or tricked into sailing into harm's way, seafarers are reportedly able to earn a small fortune if they agree to brave the short but dangerous run through the strait.

According to the Financial Times, tanker captains are making base salaries of up to $100,000 per month plus a $50,000 per-trip bonus aboard ships that make the Hormuz run. The rest of the crew can make four to six times their normal salaries - an incentive which does not ordinarily figure into the public discourse on seafarer rights and safety.

The Wall Street Journal puts the cost of a single Strait of Hormuz "shuttle" run at $40 million per trip. Even after paying sky-high war risk insurance premia, this leaves abundant margins to compensate the crew and the owner. The Journal found one Chinese crewing agency that is offering a $25,000 per-trip bonus for oilers and ordinary seamen.

The risks to crewmembers are real, but rarely fatal. Iran has yet to sink a tanker during the Hormuz crisis. Right now, there are about 30-40 vessels that regularly transit the waterway. Most do not get hit, and most hits do not injure crewmembers or disable the vessel. A recent uptick in serious incidents may change the calculus, but for now, the majority of vessel transits pass unhindered - though not all. On Monday or Tuesday, an LR2 was hit off the Omani coast during an outbound transit, injuring 12 seafarers and prompting a medevac.

The hazard pay is far less than the owners' share, but it is far more than the average salaries in seafarer-supplying regions. “Given the millions being made at the moment, [bonuses are] absolutely nothing to the shipowners,” E.A. Gibson consulting director Richard Matthews told the WSJ.