أَوْ يُوبِقْهُنَّ بِمَا كَسَبُوا ...

Or He may destroy them because of that which their (people) have earned.

means, if He wills, He may destroy the ships and drown them, because of the sins of the people on board.

... وَيَعْفُ عَن كَثِيرٍ ﴿٣٤﴾

And He pardons much.

means, of their sins;

if He were to punish them for all of their sins, He would destroy everyone who sails on the sea.

Some of the scholars interpreted the Ayah َوْ يُوبِقْهُنَّ بِمَا كَسَبُوا (Or He may destroy them because of that which their (people) have earned).

as meaning, if He willed, He could send the wind to blow fiercely so that it would take the ships and divert them from their courses, driving them to the right or the left, so that they would be lost and would not be able to follow their intended path.

This interpretation also includes the idea of their being destroyed.

This also fits the first meaning, which is that if Allah willed, He could cause the wind to cease, in which case the ships would stop moving, or He could make the wind fierce, in which case the ships would be lost and destroyed. But by His grace and mercy, He sends the wind according to their needs, just as He sends rain that is sufficient. If He sent too much rain, it would destroy their houses, and if He sent too little, their crops and fruits would not grow.

In the case of lands such as Egypt, He sends water from another land, because they do not need rain; if rain were to fall upon them, it would destroy their houses and cause walls to collapse.