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While headlines around the escalating conflict involving Iran have focused on oil and liquefied natural gas (LNG), a far less visible – but strategically critical – commodity has moved abruptly into focus: helium. Used in advanced manufacturing, medical imaging, and aerospace, helium has no practical substitute in many of its core applications. The war has highlighted how concentrated and geopolitically exposed global helium supply has become.
Helium is not mined directly; it is produced almost entirely as a by-product of natural gas processing, particularly at LNG facilities. As a result, helium supply is highly concentrated geographically and tightly linked to gas infrastructure.
According to the U.S. Geological Survey and industry consultants, Qatar produces roughly 30% of global helium supply, making it the world’s second‑largest producer after the United States. Nearly all of Qatar’s helium output is produced at the Ras Laffan Industrial City, the world’s largest LNG complex. Smaller volumes are produced in the U.S., Algeria, Russia, and Australia, but there is no meaningful global “swing capacity” capable of replacing Qatar on short notice.
The conflict has directly affected this concentration risk. Iranian drone and missile strikes on Qatar’s gas infrastructure in early March led QatarEnergy to halt LNG production and declare force majeure, instantly curtailing helium output. Subsequent damage assessments suggest that approximately 14% of Qatar’s helium export capacity – equivalent to about 4%-5% of global supply – could be offline for years, while the remainder is constrained by logistics disruptions, particularly around the Strait of Hormuz. In practical terms, nearly one third of global helium production has been temporarily removed from the market, with a portion likely lost for an extended period.
Despite its reputation as a party-balloon gas, helium’s economic importance is overwhelmingly industrial and technological:
Uses such as balloons represent less than 5% of demand and are routinely curtailed during shortages.
Helium markets are thin and largely contract-based, but spot prices have already doubled since the disruption began, at least as an indicator of stress. While many end users are initially insulated by long-term contracts, allocations – rather than price – are becoming the binding constraint.
Industrial gas suppliers are now actively managing scarcity. Air Liquide recently acknowledged that the attacks on Qatar have created a helium shortage, stating that it is reallocating helium volumes from other regions to protect strategic customers, particularly in healthcare and electronics. Management has emphasized close coordination with customers and highlighted the company’s underground helium storage in Germany as a buffer, though this is designed to smooth disruptions, not replace lost production indefinitely.
Given the visibility of semiconductor supply chains, concerns have quickly emerged around chipmaking. A number of industry participants have confirmed that Taiwan Semiconductor Manufacturing Company (TSMC) has, for now, secured sufficient helium supply and that operations are continuing normally. Taiwan and South Korea are priority destinations for high-purity helium, and industrial gas suppliers have been prioritizing advanced fabs over discretionary industrial and consumer uses.
That said, the situation remains fluid. A prolonged outage at Ras Laffan would tighten allocations further and raise costs across electronics, healthcare, and aerospace supply chains.
Helium may be an invisible input, but the Iran conflict has revealed it as a strategic choke point in modern economies. With production concentrated, substitution limited, and inventories thin, the market is once again confronting the reality that helium scarcity is not theoretical. For now, industrial gas suppliers and large end-users are managing through allocations, but the duration and severity of the disruption will be a key variable to watch in the months ahead.
John Kratochwil, MBA, P.Eng., is Senior Analyst at AGF Management Ltd. specializing in the Materials (ex-Chemicals) and Real Estate sectors.
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Content copyright © 2026 by AGF Ltd. This article first appeared in AGF Perspectives. Reprinted with permission.
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