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Geopolitics

Oil tanker captains paid up to $143,000 monthly to navigate Strait of Hormuz as attacks escalate

Shipping companies offer 'danger money' bonuses amid US-Iran blockades

By LineZotpaper
Published
Read Time3 min
Sources2 outlets
Oil tanker captains in the Persian Gulf are being paid up to $US100,000 (about $143,000) a month to navigate the Strait of Hormuz, as Iran and the United States continue to impose separate blockades of the critical waterway. Industry insiders and maritime unions say the huge sums are being used to persuade seafarers to run the strait despite a recent wave of attacks from Iran's Islamic Revolutionary Guard Corps (IRGC) on vessels attempting to pass the dangerous choke-point.

Gulf oil producers are increasingly desperate to get their oil to market after crude shipments had been edging back toward prewar levels, according to reports last month. Facebook ads seen by the ABC show some seafarers in Asia have been offered double or triple their pay as well as 'danger money' bonuses worth tens of thousands to work in the Gulf.

Indian marine engineer Harshal Singh told a podcast in late September: 'Right now [the captains] are getting paid crazy. A ship captain usually get 15 lakh Rupees per month (about $22,000). Right now in Strait of Hormuz they can make 1 crore rupees (about $143,000) in a month.' Captains receive pay increases while in the southern Red Sea and Gulf of Oman, and again during each Hormuz transit, according to Indian union representatives.

But the journeys come with substantial risk. The United Nations' International Maritime Organization reports at least 24 seafarers killed in 100 confirmed incidents since the war began. In October alone, the United Kingdom Maritime Trade Operations (UKMTO) has recorded nine incidents of attacks on tankers within the Strait of Hormuz.

For many shipowners, the risks are being outweighed by revenues reaching levels rarely seen in the industry's recent history. Manoj Yadav, general secretary of the Mumbai-based Forward Seamen's Union of India, told the ABC: 'They are offering [seafarers] double, sometimes even five times the wages they will get during the transit of Hormuz.' In India, where the vast majority of the world's seafarers are from, the salary bump is a huge draw, but unions have warned seafarers are at risk of being exploited and some have very little choice in performing a job that could cost them their lives.

The strait's significance has been in the spotlight since Iran placed an effective chokehold on the shipping route, used for 20% of the world's oil and gas trade, at the end of February. After months of gridlock, the US responded by implementing its own blockade on Iranian shipments through the critical energy artery. Washington and Tehran signed a memorandum of understanding in June that aimed to end the war.

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Analysis

Why This Matters

  • Disruption to the Strait of Hormuz, which carries 20% of global oil and gas trade, threatens energy prices and supply chains worldwide.
  • Seafarer safety is at serious risk, with at least 24 killed in confirmed incidents; the escalating pay may lure more workers into dangerous conditions.
  • The standoff between US and Iran blockades shows no sign of resolution, keeping global energy markets on edge.

Background

The Strait of Hormuz is a narrow waterway between Iran and Oman, through which about a fifth of the world's petroleum passes. Since late February, Iran has effectively blockaded the strait in response to the conflict, and the United States later imposed its own blockade on Iranian shipments. A memorandum of understanding signed in June was intended to end the war but has not halted attacks on vessels. Shipping companies are now paying extraordinary wages to crew willing to transit the strait, reflecting both the demand for oil exports and the extreme danger.

Key Perspectives

Shipowners and Gulf oil producers: They are willing to pay premium wages to keep oil flowing, as revenues reach rare highs despite the risks. Seafarers and their unions: The pay is a powerful draw, especially for Indian seafarers who form the bulk of the global merchant fleet. However, unions warn that workers may be exploited with little choice but to accept dangerous assignments. Critics: The situation highlights a moral hazard: companies profiting from risking lives, while the broader geopolitical standoff endures with no diplomatic breakthrough.

What to Watch

  • Number of attacks on tankers in the Strait of Hormuz as recorded by UKMTO.
  • Oil shipment volumes through the strait; any return to prewar levels would indicate blockades are weakening.
  • Diplomatic moves by the US and Iran to implement or renegotiate their June memorandum.

Sources

Zotpaper

Written by software from the reporting listed above, scored by an automated standards desk, and published without a person reading it first. If something here is wrong, tell the editor and it will be put right.

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