Persian Gulf — Sailors Get $25K a Trip to Move Oil Past Attacks

Sailors moving oil through the Persian Gulf are being offered as much as $25,000 a trip — two to three times a typical monthly salary — to risk strikes and drone attacks in the region, according to a Wall Street Journal report cited by the New York Post on Monday.

How much are sailors being paid to sail the Strait of Hormuz?

The per-trip payments, reported by the Journal, run up to $25,000 per sailor for a multi-day transit through the Strait of Hormuz. Oil producers are absorbing total costs of up to $40 million for a single round trip, the Post reported, as they try to keep crews willing to staff vessels through a war zone.

Is oil actually moving out of the Persian Gulf despite the attacks?

It is, according to research firm Kpler, whose data released Monday showed crude exports through the Strait of Hormuz hit 16.5 million barrels per day in September. That compares with a low of 5 million barrels a day in March, immediately after the Iran war began, Kpler's figures show — a more than threefold increase over six months. The Post reported the payouts to crews are a direct factor in that rebound, since producers have concluded it is more profitable to sell oil at thinner margins than leave it stranded in the Gulf.

How dangerous has the strait become for commercial vessels?

Nine commercial vessels were attacked near the Strait of Hormuz in the two weeks before Monday's report, according to the International Maritime Organization and the UK Maritime Trade Operations Center, which is affiliated with the Royal Navy. Those attacks resulted in two injuries and one seafarer's death, the two organizations reported. The casualty count underscores why shipowners and producers are paying crews premiums far above standard wages to keep tankers moving.

What do tanker rates show about the cost of the war?

Clarksons Research, a maritime data provider, tracked the price of hiring an oil supertanker to China at more than $1.2 million per day in late September. That is up from $231,400 a day immediately before the war started and from less than $40,000 a day in January, according to Clarksons' figures cited by the Post. The roughly 30-fold jump from January's rate to September's peak illustrates how much risk premium has been built into Gulf shipping since the conflict escalated.

Why did oil prices fall even as attacks continued?

Brent crude futures eased 1.5% to $100.74 a barrel on Monday, and West Texas Intermediate slipped 1% to $90.16 a barrel, according to the Post's report on Monday trading. Traders cited news that oil is exiting the Gulf at its fastest pace since the war started as the reason prices softened, even as attacks on vessels near the strait have increased in frequency over the same two-week stretch. The price move suggests markets are weighting the volume of oil reaching global buyers more heavily than the rising danger to the ships carrying it.

What is a 'shuttle run' and why does it cost so much?

Producers have turned to very large crude carriers, or VLCCs, to execute what shippers call "shuttle runs." In this pattern, a carrier enters the Gulf through the strait, loads oil at a port, exits through the strait again, and then transfers the cargo to a second vessel waiting outside the waterway — a method designed to minimize the time any single ship spends in the most exposed stretch of water. Producers are paying $30 million to $40 million per round trip to execute these runs, the Post reported, citing the Journal. Shipowners are described as reaping record profits from the arrangement, and sailors willing to make the run are collecting record premiums as a result.

Taken together, the figures from Kpler, Clarksons Research, the IMO and UKMTO describe a market in which risk and reward have both spiked in tandem: export volumes have more than tripled since March, tanker day-rates to China have risen roughly 30-fold since January, and attacks on vessels have continued at a pace of roughly one every day and a half over the most recent two-week period tracked by maritime authorities.

The originating report does not specify how long the $25,000 per-trip rate has been in effect or whether it varies by vessel size or route, and neither Kpler nor Clarksons' underlying methodology was detailed in the material reviewed.