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The global helium shortage caused by the conflict in the Middle East and the closure of the Strait of Hormuz is giving a boost to Canada’s emerging helium industry.
The small handful of companies producing helium in Western Canada are benefiting from increased demand, prices and investor interest.
Qatar is a key source of helium, providing about 30 percent of the world’s supply. But the Gulf country has not been able to export helium for several weeks due to shipping problems in the region and damage to one of Qatar’s most important helium facilities.
This will clearly provide a tailwind for Canadian manufacturing– Duncan MacKenzie, Global Helium
The broader fallout from the U.S.-Israeli war on Iran has caused helium prices to double, according to some experts, while raising concerns about shortages in certain parts of the world.
The gas has many uses, including medical MRI systems, rocket ships and semiconductor manufacturing, welding and party balloons.
“There is a physical challenge here because much of the world’s normal helium supply is offline,” said Duncan MacKenzie, vice president of Global Helium, which is building a production facility near Medicine Hat, Alta.
“It will definitely be a tailwind for Canadian production and Canadian producers,” he said. “It will attract interest and capital.”
Attracting investors is crucial for this emerging industry.
According to the US Geological Survey, Canada is estimated to have the fifth largest helium reserves. However, the amount of gas produced is limited.
Of the 190 million cubic meters of helium produced worldwide in 2025, only about six million came from Canada. Most interest in helium exploration is concentrated in Alberta and Saskatchewan.
To grow the sector, companies need to build production facilities and pipelines, drill new wells and increase staff.
“We have a number of good project deposits that we would like to drill and bring to production once we have the capital to do so,” MacKenzie said, addressing the need for investors. “Capital city [investment] is the constraint for us and our colleagues.”
Helium is a fairly opaque sector and there is no global reference price compared to other commodities such as oil and gold. This is partly because the majority of helium is traded through fixed contracts rather than a spot market.
Prices spiked after Russia’s invasion of Ukraine in 2022 but have been declining in recent years, said New Jersey-based helium consultant Phil Kornbluth. Prices doubled after the conflict in the Middle East began earlier this year.
“It’s an adrenaline rush for the smaller helium producers operating in Canada,” Kornbluth said.
Increased demand
For an up-and-coming company on the verge of pumping helium out of the ground across the prairies, the timing couldn’t be better as demand has increased and many industrial companies want a more diverse supply chain in the future.
“Under these circumstances, they could be double or triple oversubscribed for the product they are going to offer to the market,” Kornbluth said of new Canadian helium production.
“While that [the Iran war] If that didn’t happen, maybe they would have been lucky to sell everything and it would have been at a lower price.
VIEW | Why some are pushing to liquefy helium on the prairies:
Canadian helium producers are pushing for a domestic liquefaction plant
Canada does not have a helium liquefaction facility, forcing producers to rely on the United States. In the face of a trade war, there are now increasing efforts to decouple the supply chain.
As helium production increases in Canada, one of the biggest hurdles to growing the domestic industry will be having a facility to liquefy the gas.
Helium must be liquefied in order to be efficiently stored and transported worldwide. Some of its applications also require liquefied helium, such as MRI scanners and cooling superconductors.
Canadian university researchers have recently expressed the need for a secure domestic supply of helium, which is necessary to operate certain instruments and equipment such as magnetic resonance imaging scanners.
Currently, helium produced in Canada is condensed and trucked south to the United States, where it is liquefied. Some of this helium is then imported back into Canada for use in healthcare and other industries.
“We have a helium resource, but we don’t have a domestic helium supply chain,” said Richard Dunn, executive director of the Helium Developers Association of Canada.
The country doesn’t produce enough helium to justify the cost of building a liquefaction plant, he said.
Dunn is lobbying the federal government for improved tax relief and other measures to support the sector’s growth, similar to financial incentives to encourage mining and development of critical minerals.
The Treasury is “constantly looking for ways to improve the tax system,” including in the area of natural resources, while balancing economic priorities and budget considerations, a government spokesperson told CBC News in an emailed statement.