The correct answer is: was
The verb “to be” is used to describe the state of being or existence of something. In this case, the ship is described as being lost. The past tense form of “to be” is “was”, so the correct answer is “was”.
The other options are incorrect because they do not agree with the subject of the sentence. The subject of the sentence is “the ship”, which is singular. Therefore, the verb must also be singular. “Were” and “have” are plural verbs, so they cannot be used with a singular subject. “Has” is a singular verb, but it is used to describe the present tense, not the past tense.
In conclusion, the correct answer to the question “The ship with all its crew …… lost after the terrible storm.” is “was”.