When people think of helium, most imagine colorful balloons and funny voices. While this is understandable, it falls far short of the full picture. The economic reality is different, and it is unsettling, as helium is a strategically critical raw material for which there are simply no alternatives in many of its most important applications.
What is particularly concerning at present is that a significant portion of global production is located directly behind the Strait of Hormuz. Qatar is the world’s second-largest helium exporter after the USA. The small emirate on the Persian Gulf supplies approximately 25 to 30 percent of globally traded helium. So far, so bad, because helium is exclusively exported as liquefied gas by ship, which means that from Qatar, ships must inevitably pass through the Strait of Hormuz.
Helium occurs either trapped in rock layers in elemental form or as a byproduct of natural gas processing. It is crucial to note that this noble gas cannot be produced synthetically. It is the product of radioactive decay processes that span millions of years. Once helium is intentionally or unintentionally released into the atmosphere, it is practically lost for use on Earth.
Technically Widespread and Irreplaceable
The technical applications that depend on helium supplies read like a cross-section of modern civilization: MRI scanners in hospitals worldwide use liquid helium to cool their superconducting magnets. Without this helium, MRI operations cannot occur. Semiconductor factories that produce computer chips require helium for their manufacturing processes. If this helium supply fails, a chip shortage is the immediate consequence.
In space travel, helium is used for pressure fueling rocket propellant tanks, for fiberglass production, and for leak detection technology. A lack of helium supply will therefore sooner or later lead to a halt in the construction and launch of rockets. Deep-sea divers also require this noble gas for their breathing gas mixtures to survive at greater depths. Balloons that can no longer ascend and voices that no longer sound funny are thus humanity’s least concern, as helium is found as an indispensable component in far too many technical applications.
A permanent closure of the Strait of Hormuz will plunge the helium supply into a serious crisis with a delay of only a few weeks. Hospitals that do not have sufficient reserve tanks would have to shut down MRI machines, drastically reducing diagnostic capacities and massively swelling waiting lists. In the semiconductor industry, which has been chronically suffering from capacity bottlenecks since 2020, production cutbacks will quickly elevate the global chip shortage to a new level. The inevitable consequence of this development is that everything containing chips – from smartphones to vehicles to medical devices – will become more expensive and scarcer.
A Dilemma Without a Real Way Out
The societal dimension of this crisis can hardly be overstated. While other raw material shortages can be mitigated in the medium term through substitution or efficiency gains, helium is simply irreplaceable in its core applications. This distinguishes the anticipated helium dilemma from all other raw material problems associated with a permanent closure of the Strait of Hormuz.
Alternative helium sources in the USA, Russia, and Algeria could compensate for some of the shortfall, but capacities are insufficient to replace the Qatari share in the short term. Furthermore, their development is time-consuming. New helium projects, such as those by Pulsar Helium (TSXV PLSR / WKN A3EP2C), which are already in the development phase, are therefore particularly in demand. Especially since Pulsar’s Topaz project in Minnesota is a primary helium project, meaning the gas is not a byproduct.
The most serious problem at this point, however, is that global helium reserves are finite: what is wasted today is irretrievably lost tomorrow. A permanent closure of the Strait of Hormuz will thus not only trigger an acute global supply crisis but also further weaken the long-term assured availability of helium.
One of the lightest elements on Earth currently bears one of the heaviest strategic burdens.
