Commodity Behind the Commodity: Helium
In the first article in this series, I looked at sulphur and its hidden role in global fertiliser supply chains. The basic idea behind Commodity Behind the Commodity is that some of the most important links in global supply chains are not necessarily the ones we spend much time talking about. Sulphur was a good example, with much of it being recovered while processing oil and natural gas before eventually finding its way into phosphate fertiliser and therefore into something as fundamental as the economics of growing food.
Helium is an even stranger case. For most of us, it is probably still associated with balloons and squeaky voices, yet the same gas sits somewhere in the supply chains behind semiconductor fabrication, MRI scanners, fibre optics, scientific research and space exploration.
Its supply also has something interesting in common with sulphur. Historically, helium has often been produced not because somebody originally went looking for helium, but because somebody was already processing a much larger hydrocarbon resource. That distinction matters because it means helium supply has often been determined by decisions made elsewhere in the energy system. When disruption hit Qatar's gas industry in March, most attention naturally focused on LNG. Qatar is one of the world's largest LNG exporters, so interruptions there immediately matter for gas markets in Europe and Asia. Helium received far less attention despite Qatar being one of the most important producers in the world.
According to the U.S. Geological Survey's Mineral Commodity Summaries 2026, Qatar produced around 63 million cubic metres of helium in 2025, against global production of roughly 190 million cubic metres. That means close to one-third of world production came from Qatar alone. The market is broader than Qatar, but not by as much as you might expect. The United States produced around 81 million cubic metres in 2025, making it the world's largest producer, while Russia produced roughly 18 million, Algeria around 11 million and Canada approximately 6 million. The United States and Qatar therefore accounted for the majority of global supply between them, with most remaining production concentrated in only a handful of countries. This concentration is one reason helium is so vulnerable to disruption, but the way the gas is produced is just as important. Helium-4, the isotope that makes up almost all naturally occurring helium, is created primarily through the radioactive decay of elements such as uranium and thorium deep within the Earth's crust. Over enormous periods of time, some of that helium migrates through rock and becomes trapped inside geological formations. In commercial terms, the important point is that helium can accumulate alongside natural gas. A gas reservoir might contain methane, ethane, carbon dioxide, nitrogen, hydrogen sulphide and small quantities of helium. Processing facilities separate these components and, where helium concentrations are sufficiently high, the gas can be recovered, purified and eventually liquefied.
Qatar's enormous North Field happens to contain commercially valuable helium alongside its natural gas. Nobody developed the North Field primarily because the world needed more helium. It was developed because it contains one of the largest natural gas resources on Earth, with helium effectively coming along for the ride. Qatar's facilities at Ras Laffan have subsequently turned that geological advantage into one of the largest sources of helium anywhere in the world. The relationship is also set to continue: QatarEnergy's North Field expansion is expected to produce around 20 tonnes of pure helium per day alongside LNG, condensate, LPG and ethane.
This is where the comparison with sulphur becomes useful. In the previous Commodity Behind the Commodity: Sulphur article, I discussed how refiners cannot simply double recovered sulphur production because sulphur prices rise. Production depends partly on how much oil and gas is being processed and how much sulphur those hydrocarbons contain. Helium has historically faced a similar problem. A buyer cannot necessarily respond to a shortage by encouraging somebody to open another conventional helium mine. New geological resources have to be identified, developed and connected to purification and liquefaction infrastructure, while much of the world's existing supply is attached to larger gas projects whose economics are driven by an entirely different commodity.
In economic terms, helium production has traditionally been complementary to natural-gas production. A surge in semiconductor demand can increase the value of helium without necessarily giving a major gas producer any reason to increase natural-gas output. Helium customers therefore sit several stages downstream from the investment decision that ultimately determines how much helium becomes available. This makes the supply response unusually indirect and helps explain why relatively small disruptions can matter so much. The USGS still describes helium as being largely extracted as a by-product of natural gas, although it also notes that an increasing number of deposits are being developed where helium is either the main product or is produced alongside nitrogen rather than hydrocarbons.
When Qatar's gas-processing system stopped in March, its helium production stopped with it. There was no entirely separate helium industry at Ras Laffan able to keep operating independently of the wider gas system.
Helium pricing is difficult to follow because there is no single global benchmark equivalent to Brent crude or copper. The market is largely organised around longer-term agreements between producers, industrial-gas companies and customers, while purity, location, transport costs, specialised container availability and contractual terms will likely affect what buyers actually pay. Even so, there are useful reference points. The USGS estimated the 2025 base price for Grade-A helium at around $12 per cubic metre, or $330 per thousand cubic feet, before producer surcharges. Grade-A helium is at least 99.997% pure and represents the type of high-purity product required for many specialised applications. That figure should not be mistaken for a universal world spot price, and the absence of one is itself part of what makes the market unusual.
When Qatar's supply disappeared, Reuters reported in March 2026 that spot helium prices had doubled since the disruption began. Industry participants estimated that, if disruption persisted, prices could remain around 25–50% higher, with buyers outside long-term supply agreements particularly exposed. The important point is that a shortage can become serious without generating the kind of instantly visible price signal seen in oil or natural gas. The pressure is more likely to appear first through tighter allocations, higher contract prices and efforts by industrial users to find alternative supply.
But who is actually buying all this helium, The answer is far more industrial than its popular association with balloons suggests. According to the USGS, 22% of U.S. helium use in 2025 went into analytical, engineering, laboratory, scientific and specialty-gas applications, while another 17% went into controlled atmospheres, fibre optics and semiconductor manufacturing. Lifting gas accounted for 17%, MRI scanners 15%, aerospace 9%, welding 8%, diving 5%, leak detection 5% and other applications around 2%. These are U.S. figures rather than a perfect measure of global demand, but they give a much better indication of what the modern helium market actually supports.
Several of those applications sit inside industries whose economic value is enormous compared with the amount of helium being consumed. Semiconductors are perhaps the clearest example. The industry is usually discussed through silicon wafers, advanced lithography equipment, Taiwan, export controls, artificial intelligence or the enormous fabrication plants being built across the United States, Europe and Asia. Helium appears much further down the list, but semiconductor manufacturing depends on extraordinary control over temperature, contamination and chemical reactions. Helium is chemically inert, transfers heat effectively and can operate in environments where highly controlled cooling is required. During semiconductor production it can be used for cooling, heat transfer, leak detection, controlled atmospheres and other specialised processes. Helium does not become part of the finished chip in the way silicon does. Instead, it helps create some of the conditions under which the chip can actually be manufactured. An iPhone manufacturer does not buy helium because an iPhone contains helium, and a company building an AI data centre may never directly purchase the gas. Further upstream, however, the fabrication plants producing those chips may depend on it. The chain therefore runs from natural-gas reservoirs and helium purification through semiconductor fabrication before eventually reaching chips, servers, vehicles, phones etc. A disruption at the beginning can consequently work its way into sectors that appear completely unrelated to natural gas.
The same principle applies to MRI scanners, their superconducting magnets require extremely low temperatures, and liquid helium has traditionally been central to keeping those magnets cool. According to the USGS, there is effectively no substitute for helium in cryogenic applications requiring temperatures below around minus 257 degrees Celsius. That makes helium unusual because the applications where it is hardest to replace are also some of its highest-value uses. New superconducting systems are being developed that can operate at higher temperatures and make greater use of nitrogen instead, while newer MRI technologies can dramatically reduce the quantity of helium required, but at sufficiently low temperatures helium's physical properties cannot simply be replicated by choosing another industrial gas. That does not mean helium is irreplaceable everywhere. Its substitutability varies enormously depending on what it is being used for. The USGS also notes that hydrogen can replace helium in some lighter-than-air applications, although its flammability obviously makes the choice more complicated. Argon and hydrogen can substitute for helium in some diving applications, while argon, helium and nitrogen can substitute for one another in certain welding applications. Helium and other rare gases can also substitute for one another in some inert-atmosphere uses. The important distinction is therefore not between a world with substitutes and one without them, but between applications where substitution is relatively straightforward and applications where helium has physical properties that are extremely difficult to reproduce.
This changes how the shortage works, lower-value applications with workable substitutes are more likely to reduce consumption, switch gases or be rationed when prices rise whilst critical applications are much less responsive. A balloon company can reduce its helium use or, in some cases, use hydrogen and a welding operation may be able to alter its gas mixture. But a hospital that needs a superconducting MRI system operating at extremely low temperatures has a narrower range of choices. The market therefore does not simply experience a uniform fall in demand when helium becomes expensive. Instead, consumption is gradually pushed away from more substitutable applications while higher-value users become increasingly willing to pay to secure what remains.
This creates a hierarchy during shortages. A balloon retailer and a MRI Machine producer may technically be buyingthe same element, but the economic and social consequences of losing supply are completely different. During the Qatar disruption, industry participants told Reuters that critical applications such as medical imaging and aerospace would be prioritised over lower-value uses. The value of helium is therefore not determined only by what the gas itself costs but also shaped by the value of whatever stops working if the gas does not arrive. A semiconductor fabrication plant can cost tens of billions of dollars, while the value of the helium consumed inside it is tiny by comparison. If a specialised process cannot operate without sufficiently pure helium, the manufacturer may rationally be willing to pay far above the previous price to protect output. Another one reason why a obscure upstream commodity can suddenly acquire strategic importance. The price elasticity of demand is very different between someone filling balloons and someone trying to prevent a vastly more valuable piece of industrial equipment from shutting down.
Transport adds another layer of difficulty for buyers. Large quantities of helium are generally moved internationally in liquid form, with liquid helium boiling at around minus 269 degrees Celsius, only a few degrees above absolute zero. Maintaining those temperatures requires specialised cryogenic equipment, and some of the product inevitably boils off during storage and transport. Replacing lost Qatari supply is therefore not as simple as finding another country with helium underground. The alternative producer needs spare production, purification and liquefaction capacity, suitable cryogenic containers all while having functioning transport routes that allow the helium to be redirected. The buyer may also require a particular level of purity, while much of the alternative producer's output may already be committed elsewhere.
This is why the wider producer landscape matters so much. The United States remains the largest producer and has a comparatively developed helium infrastructure. Algeria has long recovered helium from its gas industry, while Russia possesses a very large resource base and has been expanding production through major gas-processing infrastructure, particularly in the East. Canada has emerged as a smaller but increasingly important supplier. These sources provide diversification, but their production is not automatically interchangeable at short notice. A new Russian helium supplier does not immediately solve a Japanese manufacturer's shortage if the required logistics, contracts or specialised transport equipment are unavailable, just as several million cubic metres of additional Canadian production cannot instantly replace tens of millions of cubic metres lost from Qatar. This leads to one of the more interesting changes taking place in the helium market. For much of the industry's modern history, the commercial logic was essentially that a company was producing natural gas anyway and happened to find helium worth recovering alongside it. That model remains central to global supply, but it is no longer the only one. Higher helium values, repeated shortages and more strategic industrial demand are beginning to justify projects where helium itself is the reason for exploration and development.
Canada provides one of the clearest examples. North American Helium has built a business specifically around exploring for and producing helium-rich resources in Saskatchewan. In September 2026, its Stewart Valley purification facility came online in southwest Saskatchewan at a production rate of approximately 73 million cubic feet of helium per year. The company says the facility should add more than 1% of world helium supply, while the underlying field has been assigned around 1.1 billion cubic feet of helium reserves by independent evaluator Ryder Scott. The absolute scale remains small compared with Qatar or the United States, but economically the project is interesting for a different reason. Its not just a giant natural-gas development where helium is recovered because it happens to be present. The company is mapping helium resources, drilling wells and building purification plants because the helium itself has enough commercial value to justify the investment. The winds or rather the air is starting to change. Instead of natural-gas demand indirectly creating helium supply, helium demand is now capable of generating its own projects.
That makes helium slightly different from sulphur, both commodities reveal the strange secondary supply chains created around the oil and gas economy.. Large-scale recovery from gas processing in Qatar, the United States, Algeria and Russia will remain central to the market for years, and expansion of projects such as Qatar's North Field will itself bring additional helium production. What is changing is the margin. A market that once relied overwhelmingly on helium emerging as a useful companion to another commodity is gradually gaining a standalone upstream industry.
In theory, that should make supply more responsive to helium prices over time. Under the traditional model, a doubling of helium prices did not necessarily persuade a natural-gas producer to develop a multibillion-dollar gas project. Under the newer model, higher helium prices can directly improve the economics of drilling another helium well or developing another purification plant. The response will still be slow because geological exploration takes time, projects require capital and not every discovery will prove commercially viable, but the relationship between helium demand and helium investment is becoming more direct. The USGS notes that multiple companies were exploring and developing helium deposits around the world in 2025 and that some of these resources are non-hydrocarbon sourced, reinforcing the idea that helium is gradually becoming less dependent on the conventional natural-gas model.
There is another reason this transition matters with much of helium demand being connected to industries that are themselves becoming more strategically important. Semiconductor capacity is expanding alongside AI infrastructure, electrification, cloud computing, defence electronics and digital industrial systems. MRI remains essential to modern healthcare, scientific research uses helium in cryogenic systems, and aerospace applications include pressurisation, purging and leak detection. Helium is also relevant to technologies such as quantum computing that can require extremely low operating temperatures.
That does not mean demand simply rises in a straight line. Substitution is one response to higher prices, but efficiency and recycling are another. The USGS reports that helium used in large-volume U.S. applications is still seldom recycled, although low-volume recovery and boil-off systems already exist and closed-loop recycling systems are becoming more common. Its longer-term minerals outlook similarly argues that closed-loop collection can make the helium supply chain more resilient by preventing gas from simply being released into the atmosphere after use. This is important because helium is not destroyed in many of the processes in which it is used. The problem is that once it escapes into the atmosphere, its low density means it can eventually be lost into space, making recovery at the point of use far more practical than trying to recover it later. For large or repeat users, higher helium prices can therefore make recycling systems increasingly attractive. Rather than replacing helium completely, users may simply need to buy much less fresh helium because the same gas is captured and reused.
The demand story is therefore more complicated than saying that AI, semiconductors or advanced technologies automatically produce a helium boom. Growing industrial activity can increase demand, but higher prices and supply insecurity are simultaneously encouraging substitution in applications where alternatives exist, technological redesign where less helium can be used, and recycling where the economics justify installing recovery equipment. Supply insecurity can therefore reshape technology as well as commodity markets.
There is also a wider lesson here for industrial policy. Governments increasingly talk about semiconductor sovereignty and are spending enormous sums trying to secure domestic chip-production capacity. But building the fabrication plant does not make the entire semiconductor supply chain domestic. The machinery may come from the Netherlands, speciality chemicals from Japan, wafers may cross several borders and critical gases may originate thousands of miles away. Helium exposes the difference between owning a factory and controlling all of the inputs required to operate it.
This was also one of the useful lessons from sulphur. A country might possess huge phosphate-rock deposits, but that does not automatically give it fertiliser security if it lacks the sulphur and processing infrastructure required to convert that phosphate into usable fertiliser. In the same way, spending billions subsidising semiconductor fabrication does not suddenly domesticate every gas, chemical and specialised material those factories consume. The further upstream you move, the more international the system often becomes – perhaps this pattern will continue in the next commodities I cover in this series.
There is also a geopolitical dimension. Qatar's importance means disruption around the Persian Gulf does not remain a purely Middle Eastern energy story. Its helium has supplied major industrial markets in Asia and elsewhere, including countries with substantial electronics and semiconductor industries. During the March disruption, Japanese supplier Iwatani relied partly on U.S. supply and inventories held in Japan and America to maintain deliveries, while South Korean policymakers raised concerns about materials required by the semiconductor industry. GlobalWafers, one of the world's largest silicon-wafer producers, also reviewed its helium inventories as disruption intensified. This is what makes helium strategically interesting, its importance comes less from the size of the market than from where it sits inside larger production systems, particularly semiconductors, healthcare and aerospace. Shortages are not only producing higher prices, but also pushing buyers to diversify suppliers, recycle more helium, substitute other gases where possible and support new production
A gas extracted in Qatar, Saskatchewan, Texas, Algeria or eastern Russia can therefore end up supporting a semiconductor plant in Asia, an MRI scanner in Europe or a space programme in the United States. Those industries look unrelated at the end of the chain, but further upstream they are certainly connected.
That is what makes helium another commodity behind the commodity.