Hormuz risks continue to drive up oil prices; crew members receive a bonus of $25,000 for transporting Gulf crude oil
Coinpaper
1h ago
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According to The Wall Street Journal, oil companies are paying high bonuses to crew members in order to transport crude oil amid the rising risks in the Strait of Hormuz. Despite the resumption of exports, transportation costs and insurance fees have increased significantly, yet Brent crude oil prices remain around $102.67 per barrel.
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Oil and gas producers are paying huge bonuses to crew members in order to allow crude oil to pass through the dangerous Strait of Hormuz.

According to The Wall Street Journal, some crew members were paid as much as $25,000 for a single round trip to the Persian Gulf. These payments are part of an expanding so-called "shuttle transport" system that is used to continue transporting oil through the Strait of Hormuz in the event that commercial vessels are attacked.

Under this system, oil tankers first enter the Persian Gulf to load crude oil, then pass through the Strait of Hormuz, and subsequently transfer the cargo to other vessels outside the high-risk areas. Reports indicate that the cost of a single round-trip transport can reach up to $40 million for the Gulf oil-producing countries.

Despite the high costs, this has not prevented exports. Kpler data shows that as of September 26, the average daily flow of crude oil through the Strait of Hormuz reached 14.2 million barrels, which is nearly 80% of the pre-war level.

However, the cost of transporting this crude oil to the buyers has become much higher. Recently, the freight for ultra-large crude oil tankers transporting oil from the Middle East to Asia has exceeded $1.2 million per day, whereas in January of this year, this figure was around $30,000 per day. Previously, freight accounted for about 3% of the cost per barrel at the port of arrival, but now it accounts for about 27%.

Oil prices remain above $100 per barrel.

These logistical pressures are helping to maintain high oil prices despite the recovery in exports. On Monday, Brent crude oil was traded around $102.67 per barrel, while US West Texas Intermediate crude was close to $90.62 per barrel. Brent crude oil is still more than 40% higher than pre-war levels.

However, with the resumption of Gulf exports and the G7's preparation to release 100 million barrels of crude oil and diesel from emergency reserves, oil prices still face some downward pressure.

The market is still vulnerable to new disruptions. Attacks on oil tankers and energy infrastructure continue, and shipping companies must also deal with higher insurance premiums, a limited supply of vessels, and the rising costs of persuading crew members to work in that region.

This means that the problem in the oil market is not just whether producers have enough crude oil to sell, but whether this crude oil can be delivered to customers safely and at low cost. As long as the Strait of Hormuz remains dangerous, even if physical exports resume, this logistics premium may continue to support oil prices.

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