Qatar Supplies More Than a Quarter of the World’s Helium — But It Can’t Get Shipments Out

WASHINGTON (The Washington Post) —

The diplomatic and trade embargo on the tiny Middle Eastern nation of Qatar is creating devastating ripple effects around the globe, including in one little-noticed market: helium.

No, helium is not just for filling balloons and making your voice sound like funny. The ultra-light gas is widely used in medical imaging, technology manufacturing and nuclear reactors. And the blockade of Qatar, the source of nearly one-third of the world’s helium supply, could soon cause destabilizing shortages and skyrocketing prices in this essential global market.

In 2015, Qatar supplied 27.2 percent of the global supply, according to IHS Markit, a research firm. In terms of global helium reserves, or the total amount available that could be tapped, Qatar is tied with Iran for the second-largest source, containing 17 percent of the world’s helium.

The country with the largest amount of helium is actually the United States, which has a little more than one-third of global resources, mostly near the oil and gas fields of Kansas and Oklahoma. Yet the analysts at IHS Markit say the shortfall from Qatar likely can’t be met by increasing production from these aging American fields. While American producers could benefit from higher global helium prices, they probably won’t be able to boost production enough to meet the demand that is left over from falling Qatari production.

Helium is often extracted from natural gas, an abundant resource in Qatar. Helium can be captured both at natural gas deposits and at the processing plants where the gas is transformed into a liquid for shipment.

Most Qatari helium travels by land through Saudi Arabia to the port at Dubai, from where it is shipped to markets around the world. But on June 5, Saudi Arabia, along with the United Arab Emirates and Bahrain, cut off air, land and sea links with Qatar, accusing the country of supporting terrorism and being a secret ally of Iran. Qatar has denied the charges and protested that the blockade is having a brutal humanitarian impact, cutting off access to food, medical products and other imported goods.

Production at Qatar’s two helium plants, which are co-operated by the state-owned Qatar Petroleum and Exxon Mobil, has ground to a halt, IHS Markit said. Analysts say this could soon send the price of helium skyrocketing and lead to global shortages for some manufacturers.

As the lightest known gas, helium has a variety of uses in magnetic resonance imaging, semiconductors, fiber optics, welding, and even spacecraft.

The Earth has a finite supply of helium, and for years analysts have cautioned about potential long-term shortages. Volatility in the market in recent years encouraged some businesses to recycle helium or find less efficient substitutes. The U.S. government has stockpiled helium for nearly a century, though it has sold off most of these resources in the last few decades.

The blockade shows no immediate signs of resolution. On Friday, Saudi Arabia and its allies issued a list of 13 demands for lifting the blockade, giving Qatar 10 days to cut ties to groups like the Muslim Brotherhood and shut down the broadcaster Al Jazeera.

In an editorial in The Washington Post last week, Qatar’s ambassador to the United States called these claims a “smokescreen for an attempt to infringe upon Qatar’s sovereignty and punish Qatar for its independence.”

In comments June 9, President Trump appeared to express support for the blockade. “The nation of Qatar, unfortunately, has historically been a funder of terrorism at a very high level,” he said. “We have to stop the funding of terrorism.”

Some analysts have seen President Trump’s support of the blockade and his May 20 visit to Riyadh as emboldening Saudi Arabia’s actions. Yet in subsequent remarks, the U.S. State Department criticized Saudi Arabia and its allies for failing to clearly justify the embargo on Qatar, where the United States maintains a military base.

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