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The Takeaway
Conflicts in the Middle East have triggered a helium shortage that is rattling high-end chipmakers, with cascading consequences across global supply chains, from consumer electronics to AI infrastructure. As supply pressure mounts, Beijing seeks to fortify its resource alliance with Moscow to secure stable access to outpace rivals in the advanced technology race. Canada, meanwhile, could emerge as a major alternative supplier for allies and partners, but it will take deliberate policy action to build the domestic supply chain that is currently lacking.
In Brief
- The conflict in the Middle East has fractured the global helium supply chain, taking a significant share of production offline for an element with no viable substitute. A critical input for semiconductor fabrication, fibre-optic manufacturing, and the aerospace industry, helium is classified as a "critical mineral" by Canada, Japan, the European Union, and others.
- Accounting for roughly a third of global helium production, Qatar’s output was severely disrupted after Iranian attacks on the Ras Laffan and Mesaieed LNG facilities forced state-owned QatarEnergy to halt operations in March. Since helium is typically extracted as a byproduct of natural gas processing, the halt has also suspended helium production. Qatar has said repairs to its LNG capacity could take up to five years.
- Canada holds one of the world's largest helium endowments, but its longstanding reliance on the U.S. for final processing — the step that transforms raw helium into a high-value, exportable product — has left Canadian industries vulnerable to supply disruptions.
Implications
The chip industry sits in the crosshairs. Helium is indispensable in chipmaking, used to prevent silicon wafers from overheating and flush out toxic chemical byproducts; a prolonged shortage could force major producers to scale back output. The risk is especially acute for Taiwan and South Korea, which rely heavily on Qatari supply and are home to chip giants TSMC, Samsung, and SK Hynix, companies on which the world's critical technology depends. Meanwhile, Taiwan faces an added layer of exposure, with no meaningful domestic energy production and a reliance on Qatar for a third of its LNG imports, which fuel roughly half of the island's energy mix. With only an 11-day LNG reserve, time is of the essence: Taiwan's chip industry, for one, has for the first time publicly voiced support for the controversial restart of the island's nuclear power plants.
While Beijing maintains a stranglehold on many strategic resources, it depends on imports for over 80 per cent of its helium needs. Of this total, exports from Qatar and Russia accounted for 54 per cent and 44 per cent, respectively, in 2025. As Qatar’s output falters, analysts anticipate China to lean further on sanctioned Russian supply, a shift already underway, with Russian exports to China up 60 per cent year-on-year in 2025. Analysts warn this will further tighten an already constrained global pool.
China has pushed to reduce its dependence, with policies ranging from opening the world's first high-purity helium extraction plant for coal-bed methane in 2023 to broader efforts to develop alternative domestic sourcing. Industry projections, however, suggest the country will still rely on imports for the majority of its needs by 2028. If Western countries fail to ramp up alternative sourcing in the meantime, an ongoing helium shortage could tilt the advanced technology race in China's favour.
Canada holds the world's fifth-largest helium reserves, yet it remains a marginal producer, contributing a mere one per cent of global output. Lacking domestic liquefaction capacity to convert helium gas into the liquid form required for efficient bulk transport and cryogenic applications such as MRI cooling, Canadian helium must be shipped to the U.S. to be liquefied before being reimported. Canada also relies on supplies from volatile regions, including Qatar and Algeria. This circular dependency leaves Canada at the mercy of global supply chokepoints. Industry has long argued that Ottawa has failed to treat helium on par with other critical minerals, leaving it excluded from key support programs such as the federal mining tax incentives.
What’s Next
1. Canada could step up as alternative supplier
Unlike most producers, where helium is a byproduct of natural gas drilling, Canada’s geology allows for direct helium extraction. This enables lower emissions and reduces exposure to energy market volatility. With geopolitical risk present across all major suppliers, global stakeholders are looking to Canada as a natural long-term alternative. Saskatchewan is already moving ahead with plans for Canada's first liquefaction hub, aiming for a 10 per cent global market share by 2030. Realizing that goal will require significant investment in the infrastructure needed to bring Canadian helium to markets.
2. Other critical resource shortages warrant attention
Beyond helium, several industrial staples are under strain. Sulphur, a byproduct of oil and gas refining, is a key feedstock for sulphuric acid, which is essential for processing critical minerals. The Middle East accounts for roughly 24 per cent of global sulphur production and around 50 per cent of global seaborne sulphur trade, nearly all of which passes through the Strait of Hormuz. Beijing's planned halt on sulphuric acid exports from May threatens to tighten supply further, adding pressure on the mineral industries and the supply chains built on them.
• Edited by Vina Nadjibulla, Vice-President Research & Strategy, and Ted Fraser, Senior Editor, APF Canada.
