It’s not just oil — the Iran war is disrupting helium and aluminum supplies. Here’s the impact.

The ongoing Iran war has far-reaching implications beyond just disrupting the global energy market. It is now threatening the world’s supply of helium and aluminum, two key materials used in a wide range of products including semiconductor chips, medical equipment, and everyday goods.

The recent attacks on two liquid natural gas facilities owned by state-run QatarEnergy have resulted in a halt in helium production in Qatar, which accounts for approximately one-third of the world’s helium supply. Helium, a byproduct of natural gas processing, is crucial for various industries, including semiconductor manufacturing. The attacks have wiped out 17% of Qatar’s LNG export capacity, and it could take three to five years to repair the damage, according to reports.

The helium shortage has largely gone unnoticed amidst the focus on oil and gas prices, which have been on the rise. Helium is essential for semiconductor manufacturing, as it is used in cooling wafers during the etching process to form transistor structures. Without an adequate supply of helium, the production of chips that power devices like laptops, iPhones, and other electronics could be severely impacted.

In addition to semiconductor manufacturing, the medical industry relies on helium for cooling superconducting magnets in MRI machines, while the space industry uses it to purge rocket fuel tanks. The shortage of helium could have a cascading effect on various sectors, including AI data centers, as chip manufacturers struggle to meet their manufacturing goals.

Furthermore, a prolonged conflict in Iran could also lead to shortages of nitrogen and aluminum, with aluminum prices already reaching a four-year high. Roughly 9% of the world’s aluminum supply comes from Gulf countries, and disruptions in the region are already tightening market conditions and pushing prices higher. This could directly impact consumer goods packaging costs, as well as industries like automobile and electronics that heavily rely on aluminum.

As helium and aluminum supplies face uncertainty due to the Iran war, industries across the board are bracing for potential disruptions and price hikes. It’s crucial for businesses to assess their supply chain risks and adapt to the changing market conditions to mitigate the impact of these shortages. The global economy is facing challenges on multiple fronts, and it’s essential for stakeholders to stay informed and prepared for the uncertainties ahead.