Shipowners are offering unprecedented bonuses, some exceeding $100,000, to captains and crews willing to transit the Strait of Hormuz. This surge in hazardous pay reflects the escalating dangers in the waterway, including drone attacks, mine-laying, and direct military encounters. The bonuses are designed to compensate for the extreme risks, which now include the potential for vessels to be caught in crossfire, or targeted directly, as US and Iranian forces conduct military operations in the area.
These high bonuses are significantly impacting shipping costs, with some insurers increasing premiums by 200%. For a typical large crude carrier, the extra cost for a single captain could add over $0.5 million to a journey, not including other crew bonuses and heightened insurance rates. This financial burden is prompting some shipping companies to consider longer, more expensive alternative routes around Africa, avoiding the Strait of Hormuz altogether, which could further drive up global shipping prices.
The increased cost of transit is already being passed on to consumers. With about one-fifth of the world's oil and a significant portion of liquefied natural gas passing through Hormuz, these higher expenses are contributing to rising energy prices globally. Analysts predict that if the militarization of the strait continues, leading to mass crew refusals or mandatory diversions, the impact on commodity markets could be severe and prolonged.
