The Strait of Hormuz has become one of the most expensive lanes in global shipping.
Despite steady attacks from Iran, oil tankers and other commercial vessels have continued moving through the narrow waterway. With protection from the U.S. military and help from pipelines bypassing the strait, Persian Gulf oil flows have returned to prewar levels.
But Iran has stepped up drone and missile strikes on ships recently, including vessels outside the immediate vicinity of Hormuz, as it seeks to reassert leverage over the global oil chokepoint. Traffic has dipped in response, yet ships continue to cross, often making shuttle runs in and out of the Gulf and unloading cargo through ship-to-ship transfers.
That danger comes with a steep price. Tanker captains can earn $100,000 a month for transiting the strait, plus a $50,000 bonus for each trip, according to sources cited by the Financial Times. Regular pay is about $15,000 a month. Sailors, who typically make as little as $1,500 a month, can see earnings rise by at least four to six times their normal rates on Hormuz runs.
The premiums are not limited to crews. Shipowners are paying for insurance as well, and the war risk can command 6%-10% of a ship’s value, translating to up to $20 million for a supertanker sailing through the Gulf. Freight rates for cargoes crossing the Strait of Hormuz hit a record high of $1.3 million per day, up from last year’s daily rate of $20,000-$50,000.
The ripple effects are spreading well beyond the strait. All the ships needed to get oil out of the Gulf have contributed to a global tanker shortage that has pushed freight rates higher worldwide. Shipbroker Gibson said hiring a tanker to travel from the U.S. to China costs about $80 million, more than the $74 million price tag for a standard SpaceX Falcon 9 launch. Brokerage SSY said rates are now the highest since the supertanker era began in the 1960s, even after inflation.
Those costs are starting to bite into margins. European refiner Repsol saw its margin fall from $36 per barrel in the third quarter to $15 in October, according to analysts at RBC. If freight costs keep climbing, they could erase the profits that oil and refined fuels still generate and force refiners to process less crude.
The market is doing what markets do when force enters the equation: it prices risk, reprices supply, and punishes inefficiency. Capital rewards clear rules, not missile fire, and the taxpayer eventually pays when global energy flows become hostage to instability. If the danger premium keeps rising, the cost will not stay in the Gulf. It will travel downstream through freight, refining, and the price of doing business.
