What fun! Unfortunately it’s not a mirage, it’s flat calm out near the ship and breeze stirring the water nearer the shore. Look carefully at the ship area and you’ll just make out the faint horizon, the real horizon.
To reinforce this with a few illustrations;
If the water is still, the reflection is clear.

If the water is disturbed, it is less clear.

In the OP's case, the water is calm near the ship, and simply reflects the sky. Since the reflection is almost the same colour as the sky, it becomes more difficult to tell sky and sea apart. If there are clear white clouds and blue sky, this task is made easier, but an overal greyish-white melange of clouds does not help.
Regardless of whether lands and sea are globe or flat, I would suggest the observer's view from onshore has disturbed water closer to shore, with still water beyond that and nearer to the ship. This leads to the still water reflecting, and looking like, the sky, making it appear as though the ship is in the sky.
Side on, this would be the geometry of it;