The Helium Squeeze: A Lighter-Than-Air Crisis

Few commodities combine strategic importance with quirky scarcity quite like helium. In the public imagination it fills party balloons and makes voices squeaky. In reality, it keeps MRI machines running, cools superconducting magnets in particle accelerators, stabilises fibre-optic cables, and gives guided missiles the edge they need in flight. It is an irreplaceable cog in modern supply chains—one that is in tighter supply than ever.

The vanishing reserve

For decades, the United States cushioned the world from helium shortages by holding vast stockpiles in the Federal Helium Reserve in Amarillo, Texas. Created during the Cold War, it ensured the military could always inflate airships or cool missile guidance systems. That reserve is now being wound down and sold off, stripping the market of its emergency buffer. The auctioning of its remaining helium is expected to finish within the next two years, just as demand intensifies.

Testimonial
"When the U.S. Reserve was in play, supply shocks were rare. Now every outage at a plant in Qatar or Algeria ripples across global prices," says a European industrial-gas executive.

Who buys, who supplies

The biggest buyers today are not party-balloon makers but hospitals (MRI scanners account for over a quarter of demand), semiconductor manufacturers, space agencies, and defence ministries. The U.S., Japan, South Korea, and Germany are the heaviest consumers.

On the supply side, production is geographically lopsided. Roughly 55% of global helium comes from the United States, Qatar, and Algeria. Smaller but rising suppliers include Russia, which plans to expand output from the Amur gas processing plant, and Tanzania, which has promising reserves linked to volcanic activity.

Global Helium Demand by Sector (2023, % share)

Medical Imaging (MRI)         ██████████ 28%

Semiconductors & Electronics  ████████   22%

Scientific Research           ██████     15%

Aerospace & Defence           █████      12%

Industrial (Welding, Optics)  █████      11%

Other (incl. balloons)        ██          7%

Top Producing Countries (2023, % share)

United States     ██████████████████ 38%

Qatar             ██████████          27%

Algeria           ██████              11%

Russia            ████                 8%

Others            █████                16%

Chart: Global Helium Demand vs. Supply Sources (2023)

Source: ARIA, Technical Papers

A tale of two heliums

Most helium today is produced as a by-product of natural-gas processing, in which the gas is separated from methane. This “grey” helium is carbon-intensive. A nascent industry of “green helium” aims to change that by extracting helium directly from reservoirs where it occurs naturally, without piggy-backing on fossil-fuel production. Such projects, including ones in North America and East Africa, pitch themselves as a cleaner way to meet demand while aligning with energy-transition goals.

Testimonial
"Green helium won’t move the needle overnight, but investors increasingly ask whether their supply chain can square with net-zero pledges," notes an analyst at a Canadian investment fund.

Market dynamics

The global helium market is worth around $5bn annually and is projected to grow by about 6% per year through the next decade, driven largely by medical imaging and semiconductor fabrication. Prices have been volatile—spiking during outages in Qatar (which alone produces about 30% of the world’s supply) and again after delays at Russia’s Amur plant.