Hormuz 'Death Bonus': Wartime Shipping Under Western Military Blockade Pushes Risk onto Global South Seafarers

In the Strait of Hormuz, a captain can earn a US$50,000 bonus for a single crossing, and tanker crews can earn four to six times their normal wages. Yet shipping executives estimate that the probability of being hit is roughly one in twenty.

Since the United States and Israel went to war against Iran at the end of February, the world's most critical oil shipping waterway has been transformed into a high-risk operating zone. Iran has all but shut the strait, allowing only a small number of vessels to obtain passage permits and launching attacks on ships transiting without its explicit authorization. The United States, citing Iran's blockade, has imposed a naval blockade on Iranian ports while providing escorts for some vessels.

The risk is being borne by seafarers from India, the Philippines, and China. According to the Financial Times, tanker captains' base salaries can reach US$100,000 — on the higher end of what shipping companies pay — with an additional US$50,000 bonus for each transit. The Wall Street Journal, meanwhile, reports that a Shandong ship manpower company is offering up to US$25,000 for a single round trip — for a bunker worker or an intern, that sum amounts to more than a year's wages.

The risk is now manifesting in concrete terms. The United Kingdom Maritime Trade Operations (UKMTO) reported that a vessel off the northern coast of Qatar was struck by multiple projectiles, causing casualties, the specific numbers of which were not disclosed. Shipping data firm Kpler shows that the number of detectable vessels passing through the strait has fallen to its lowest level in more than two months, with just seven vessels transiting in the previous week — the lowest since July 23. But many smaller shuttle vessels switch off their transponders before transiting to avoid detection, so the actual number may be higher.

Last week, attacks on tankers reached their highest level since the war began. Saul Kavonic, head of energy research at MST Marquee, told Reuters that the frequency of Iranian attacks on ships is "currently at its highest level since the war began and could intensify further." He added that "constrained product flows, extreme logistics costs and a high likelihood of Iranian escalation" are keeping oil prices elevated.

How are vessels getting through? According to Bloomberg, captains receive strict instructions: turn off the lights, shut down positioning transponders, put away mobile phones, keep only one radar, and navigate by coastlines and lighthouses. Crews stack sandbags on the main deck to prepare for drone or missile strikes.

One captain interviewed by Bloomberg in the Philippines had just finished a three-month stint of transiting the strait. He said that on one voyage, when he saw a fire ahead, he immediately called the US Navy — which has been assisting vessels in avoiding mines — to warn of a possible attack. He said his most recent contract was shorter than usual because he knew the runs "weren't easy," but he still earned several times his normal pay.

Costs keep climbing. The Wall Street Journal reports that shipping companies spend US$30 million to US$40 million on a single round trip for ship-to-ship oil transfers. Brent crude futures rose 2.28 percent to US$102.28 per barrel, while West Texas Intermediate futures climbed 1.88 percent to US$89.94 per barrel.

Kpler data shows that at least 16.5 million barrels of oil were exported from the region last month (excluding Iran, which is under US naval blockade), roughly on par with prewar average levels. But about 40 percent of that was exported via the Saudi East-West Pipeline or by shuttle tanker ship-to-ship transfers — the latter meaning smaller vessels braving higher risks to ferry oil to larger tankers waiting outside the strait.

Mohamed El Hawawy, head of Middle East shipping and insurance at international law firm Stephenson Harwood, said rising captain pay is part of the "new economics" of transiting the strait, and shipping will not stop on that account. But he also acknowledged that "more attacks could deter more shipping companies from passing through the strait, affecting trade," and noted that insurance and other related costs would also rise.