The global shortage of helium caused by the conflict in the Middle East and the closure of the Strait of Hormuz is providing a boost to Canada’s nascent helium industry.
The small handful of companies involved in producing helium in Western Canada are benefitting from increased demand, prices and interest from investors.
Qatar is a pivotal source of helium, providing about 30 per cent of the world’s supply. But the Gulf country hasn’t been able to export helium for several weeks because of shipping challenges in the region, in addition to damages sustained by one of Qatar’s main helium facilities.
The broader fallout of the U.S.-Israeli war on Iran has caused helium prices to double, some experts say, while causing concerns about shortages in certain parts of the world.
The gas has many uses, such as for medical MRI systems, rocket ships and semiconductor manufacturing, welding and party balloons.
“There’s a physical challenge here with so much of the world’s normal helium supply offline,” said Duncan MacKenzie, a vice-president at Global Helium, which is developing a production facility near Medicine Hat, Alta.
“It’ll clearly put a tailwind behind Canadian production and producers,” he said. “It’ll attract interest and capital.”
Attracting investors is critical for this upstart industry.
Canada is estimated to have the fifth-largest reserves of helium, according to the U.S. Geological Survey. But the amount of gas being produced is limited.
Of the 190 million cubic metres of helium produced around the world in 2025, only about six million came from Canada. The most interest in helium exploration is focused in Alberta and Saskatchewan.
To grow the sector, companies will need to build production facilities and pipelines, while drilling new wells and adding staff.
“We have a good runway of prospects that we would be delighted to drill and delighted to put into production as soon as we have the capital to do so,” said MacKenzie, addressing the need for investors. “Capital [investment] is the constraint on us and on our colleagues.”
Helium is a pretty opaque sector and there is no global reference price compared to other commodities, such as oil and gold. Part of the reason is because the overwhelming amount of helium is traded through fixed contracts rather than a spot market.
Prices spiked following the Russian invasion of Ukraine in 2022, but were on the decline 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 a shot of adrenaline to the smaller helium producers that operate in Canada,” Kornbluth said.
For an upstart company about to begin pumping helium out of the ground on the Prairies, the timing couldn’t be better, as demand has increased and many industrial companies want a more diverse supply chain for the future.
“Under the circumstances, they might be double or triple oversubscribed for the product that they’re going to offer to the market,” said Kornbluth about new Canadian helium production.
“Whereas if this [the Iran war] didn’t happen, they might have been lucky to sell it all, and it would have been at a lower price.”
Canadian helium producers push for a domestic liquefaction plant
While Canadian helium production is increasing, one of the biggest hurdles to growing the domestic industry will be having a facility to liquify the gas.
Helium must be liquefied to be stored efficiently and transported globally. Liquified helium is also required for some of its uses, such as MRI scanners and superconductor cooling.
Canadian university researchers have recently spoken out about the need for a secure domestic supply of helium, which is required to operate certain instruments and equipment, such as nuclear magnetic resonance scanners.
Currently, helium produced in Canada is condensed and trucked south to the U.S., where it is liquefied. Some of that helium is then imported back into Canada for use in health care and other industries.
“We have a helium resource, but we do not 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 constructing a liquefaction facility, he said.
Dunn is lobbying the federal government for improved tax breaks and other measures to help grow the sector, similar to financial incentives to encourage the mining and development of critical minerals.
The Department of Finance is “constantly seeking ways to improve the tax system,” including in the natural resources sector, while balancing economic priorities and budgetary considerations, a government spokesperson told CBC News in an emailed statement.
