How US-Iran war has triggered a global helium crisis
What's the story
The ongoing conflict in Iran is not just affecting energy supplies but also disrupting the supply of helium, a gas critical for cooling artificial intelligence chip-making tools and MRI scanners. The global helium supply is being affected by the suspension of natural-gas exports from Qatar, which accounts for about one-third of the world's total.
Production challenges
Helium shortage could impact production of various products
The helium shortage is straining a market where supplies can't be quickly ramped up. This could hamper the production of semiconductors, military-drone components, and space rockets. Although many chip makers and defense manufacturers won't feel the pinch immediately, some suppliers have already warned their customers about potential supply cuts and surcharges due to this global helium crisis.
Versatile gas
Why is helium important?
Helium, the second most abundant element in the universe after hydrogen, is rare on Earth. It mainly exists in small concentrations in pockets of natural gas. Energy producers separate it from methane, nitrogen and other gases before shipping it as a supercooled liquid. The gas has no easy substitute for many current semiconductor cooling applications and is used across various industries including medical imaging, aerospace technology, fiber-optic manufacturing, and defense applications.
Geopolitical dependence
Qatar's LNG shipment disruptions have curtailed helium supply
Ralf Gubler, Research Director at S&P Global Energy, has warned that the helium shock highlights a deeper vulnerability in the AI build-out: extreme dependence on a small number of geopolitically exposed nodes. Qatar's liquefied natural gas shipments disruptions have directly curtailed helium feedstock. The country exports almost all its helium via the Strait of Hormuz, which has been paralyzed by conflict.
Impact
Iranian strikes have caused extensive damage to Qatar
Iranian strikes on Qatar's Ras Laffan LNG plant earlier this month have caused extensive damage, cutting its annual helium exports by 14%. The country said it could take up to five years to repair. Some suppliers are already rationing their helium supplies. Citing the Qatari outage, US industrial gas supplier Airgas declared a force majeure earlier this month, and told one customer that it would only meet up to half of their normal monthly helium demand.