Strange pearl surrounds the sailor's story (7)
I believe the answer is:
parable
'story' is the definition.
(I know that parable is a type of story)
'strange pearl surrounds the sailor's' is the wordplay.
'strange' indicates an anagram.
'surrounds' indicates putting letters inside.
'the sailor' becomes 'ab' (abbreviation for able seaman).
'pearl' with letters rearranged gives 'parle'.
'parle' placed around 'ab' is 'PARABLE'.
(Other definitions for parable that I've seen before include "Gospel story" , "Bible story" , "Story illustrating moral lesson" , "Leap bar poorly for a biblical story" , "Instructive story" .)