The ongoing conflict in the Middle East has significantly disrupted global helium supplies, drawing attention to Canada’s potential role in stabilizing the market. Helium, a critical element used in diverse applications from MRI cooling and rocket pressurization to advanced semiconductor manufacturing, is facing supply challenges as key production regions experience turmoil.

Since late February, tensions and hostilities involving the United States and Israel against Iran have affected the Persian Gulf region, notably impacting helium output in Qatar, which previously accounted for about one-third of the world’s supply. Damage to infrastructure and limited access through the Strait of Hormuz—an essential shipping route—have curtailed Qatar's ability to fully restore helium production, with estimates suggesting repairs could take three to five years. Additional pressures on the market have arisen from the war in Ukraine, where Ukrainian strikes on Russian energy facilities, along with Russian export controls tied to military demands, have further reduced helium availability.

In response, some Middle Eastern buyers have sought alternative sources, including Canadian producers such as Avanti Helium Corp. Chris Bakker, Avanti’s CEO, noted a growing interest from regional customers who traditionally relied on local supply. Canada holds approximately 20 percent of the world’s helium reserves, primarily located in the southern Prairies, but currently contributes only about 2 percent of global helium production.

The Canadian helium extraction process differs from that of Qatar’s, as the gas is found in underground pockets associated with nitrogen, separate from natural gas deposits. Industry players are advancing plans to develop a helium production hub in southwest Saskatchewan, where North American Helium aims to establish the country’s first liquefaction facility. Liquefaction, which cools helium to –269°C for efficient transport, is a current challenge since Canada currently lacks domestic liquefaction infrastructure and must send gas to the United States for processing and export.

Experts emphasize the critical importance of helium in high-tech sectors, particularly semiconductors, where demand is increasing rapidly amid global advancements in artificial intelligence. Karen Hui, a project coordinator with the Asia Pacific Foundation’s Canada-Indo-Pacific Critical Minerals Hub, explained that major chip producers in Taiwan and South Korea are heavily dependent on Qatari helium supplies with limited backup reserves, making supply security a prominent concern.

Despite Canada’s resource potential, industry representatives highlight regulatory and financial obstacles hindering expansion. Helium, designated one of 34 critical minerals by the Canadian government owing to supply chain vulnerabilities, does not currently benefit from aligned tax incentives that support exploration and development, such as flow-through shares and specific tax credits available to other critical minerals. Richard Dunn, executive director of the Helium Developers Association of Canada, has urged the federal government to address these gaps, calling for measures that could attract capital investment needed to scale production and domestic liquefaction capacity.

The government has indicated awareness of the sector’s potential. In correspondence with industry representatives, Natural Resources Minister Tim Hodgson affirmed that securing access to critical minerals, including helium, is a national priority. Discussions continue on possible support mechanisms that might include long-term offtake agreements and financial tools like contracts for difference to stabilize producer revenues amid volatile commodity prices.

While some companies, like Avanti Helium, are currently focusing on projects in the United States due to a more favorable business environment, stakeholders express a desire to expand operations within Canada. To fully realize this potential, experts highlight the need not only for policy adjustments but also investment in infrastructure, including specialized cryogenic containers and improved transport networks for moving liquid helium globally.

As geopolitical tensions persist, Canada’s resources and industry initiatives position it as a potential reliable helium supplier, but the timing and scale of its contribution will depend on navigating economic, regulatory, and technical challenges in the near term.