‘The scars will remain': Petrochem’s founder counts cost of war

‘The scars will remain': Petrochem’s founder counts cost of war | AGBI
June 9, 2026
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INTERVIEW
Petrochemicals
‘The scars will remain’: Petrochem’s founder counts cost of war
By
Shruthi Nair
June 8, 2026 7:35 AM
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The Petrochem headquarters in Jebel Ali free zone, Dubai Copyright: Supplied
Yogesh Mehta rues Hormuz situation
Unimpressed by alternative routes
Crisis hobbles UAE’s re-export model
“Frustration, insecurity, anxiety…” These are some of the words that illustrate how veteran UAE businessman Yogesh Mehta feels about the US-Israeli war with Iran that has crippled trade around the globe.
For 36 years, Mehta has watched Dubai’s transformation from a fishing village to a metropolis, through the Gulf War, the 2008 crash, the Arab Spring and Covid-19.
He has navigated each of those crises from the same vantage point: at the helm of Petrochem Middle East, the chemicals distribution empire he founded in 1995 and built into a regional powerhouse with $2 billion in annual turnover and 250 employees across seven countries.
But even he has never seen anything quite like this. Mehta, whose business-speak is littered with metaphors, describes the UAE as “a clean white shirt” now “stained with drone and missile attacks”.
The effective closure of the Strait of Hormuz , through which 90 percent of Petrochem’s business normally flows, has understandably hit the company hard, and there remains no meaningful replacement or alternative route for the company’s operations, Mehta says.
Petrochem founder Yogesh Mehta with his son Rohan, Petrochem’s managing director
The company’s Jebel Ali terminal, capable of handling 180 chemical variants across 50 bulk storage tanks, was well-stocked when the conflict began. The initial surge in oil prices that accompanied the war’s outbreak briefly helped margins. But this has provided Mehta no reassurance. As prices stabilise, the trimming of margins will begin.
“If there’s not enough margin, then you have a challenge with the overheads,” he said, noting that as a large company, higher overheads become a weakness.
“We are now saving for the rainy day that’s going to approach,” he says. “If the crisis continues for longer, then we will have to burn cash.”
That is not a problem unique to Petrochem. It is a warning for the wider economy, says Mehta.
Chemicals underpin construction, pharmaceuticals, energy and manufacturing – the key ingredients of any functioning economy. When they stop moving, everything downstream slows with them.
Economy at half-capacity
As much as the closure of the Strait of Hormuz has reignited conversations around local manufacturing – something highlighted at the Make it in the Emirates event in May – it has inhibited the UAE’s ability to produce locally.
More than 90 percent of Petrochem’s imported raw materials go to local manufacturing industries, with much of the processed output re-exported into Asian markets. The model – consolidate in Jebel Ali, repackage, add value, re-export – is a microcosm of the country’s trade model itself, given the UAE is among the world’s top five re-export hubs.
That model is now running at half speed.
“[UAE factories] are manufacturing at half capacity or less because they are built to export,” says Rohan Mehta, Yogesh’s son and the company’s managing director.
With both imports and exports curbed, manufacturers are limiting production.
“The crisis has taken two wheels off the car,” his father adds.
The Petrochem base in the Jebel Ali free zone, Dubai
The ‘fashionable’ and the real
Like many regional businesses, Petrochem has tested the alternative corridors, such as the UAE’s Khorfakkan and Fujairah and the Red Sea port of Yanbu on Saudi Arabia’s western coast.
Mehta is grateful for their existence and the government’s initiative to mobilise them. He does not share the enthusiasm with which some, including his son, have greeted them as a structural fix.
“Let’s not be fashionable,” he says.
Saudi Arabia’s overland route , the so-called back door to the Gulf, is a long road through a suffocated corridor.
The alternatives are untested, costly and even add confusion rather than clarity to already strained supply chains. “Trade routes are not like a pizza pie,” he says, “where you can draw and cut the edges as you want.”
An unlikely saviour
The war has, in one respect, produced an unexpected reversal. Mehta has spent years criticising China for flooding chemical markets with excess supply and driving prices to levels that undercut competitors and distort global trade.
But it seems like the critique was conditional on a world in which the Strait of Hormuz stayed open.
“China has been the saving grace – factory to the world,” he says now. Chinese production scale, logistics capacity and willingness to fill supply gaps have provided a buffer when the world needed it the most. India, for instance, is buying products from South Korea, Taiwan and China.
Yesterday’s adversary is doing the heavy lifting in a war-torn trade world today.
Alternative routes, new alliances and emergency stock buffers can buy time. But the only absolute solution for businesses, economies and governments is a total resolution of the conflict.
“It will have to be in a way where it’s a win-win for most. It will never be win-win for all,” he said.
“The wound may heal and some resolutions may be found,” he says. “But the scars will remain, because the hurt is very deep.”
Further reading:
Frank Kane: The Strait of Hormuz may never truly reopen
Pure Harvest: farming the Gulf’s future in a time of war
Gulf cloud infrastructure has a ‘target on its back’
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