The Middle East crisis has presented distinct challenges to helium startups across production, financial and strategic areas, but also new opportunities. Here we summarise some of the key dynamics that have arisen in the last six weeks.
Reduced production capacity
At the most fundamental level, the supply squeeze is leading to reduced production capacity which will impact on operators’ production goals and ability to meet market demand. Replacing a third of the world’s helium supply [from Qatar] and with suppliers declaring force majeure, companies are being forced to ration helium, placing additional constraints. For each month the crisis persists, the market is losing about 5.2 million cubic metres of helium.
Helium startups may be able to overcome production issues by focusing on primary helium exploration, adopting advanced purification technologies, implementing modular, scalable infrastructure to improve efficiency and reducing reliance on conventional, high-concentration natural gas byproduct sources – but they all present their own cost, infrastructural or logistical challenges.
Increased costs
Arguably the biggest factor of all. With the drop in helium supply leading to , helium startups are in a vulnerable position. Some alleviating options include efficiency measures, adopting recycling technology and restructuring procurement to bypass intermediaries, but they may take time to implement and unlikely to be viable in the short to medium term.
In many cases, startups will be forced to seek additional funding to weather the current market volatility and supply disruptions. For example, Helium One Global has engaged in funding rounds (£3.5m plus an additional £1m) to keep projects such as the US Galactica-Pegasus project moving.
New producers face the added challenge of transitioning from spot market pricing to securing stable, multi-year, or long-term offtake agreements to ensure revenue reliability in a market which now looks likely to be volatile for months, irrespective of a swift resolution to the war.
Strategic adjustments
Startups are now faced with a harsh choice: reducing output or prioritising critical products. This may lead to broader repositioning, from pure exploration firms in developing markets to facilitators of production in stable jurisdictions, thereby making it easier to attract capital for infrastructure and offering ‘localised’ supply solutions.
The crisis may spur vertical integration and midstream investment. Rather than just selling raw gas, startups could move towards building their own purification facilities to produce 99.999% pure helium, allowing them to sell directly to high-priority industrial customers in semiconductors and medical sectors.
In the medium to long term, operators will need to work on strategic long-term initiatives that reclassify helium as a strategic asset rather than a commodity; this looks sure to be one of the legacies of the current crisis.
Partnerships and logistics
On the plus side, the crisis provides startups with the chance to form alliances with end-users in the tech sector, leveraging the urgency of chip manufacturers who are facing force majeure situations and looking for alternative, non-Middle East suppliers. With conventional shipping routes blocked and , startups are innovating their logistics to ensure helium can reach customers before it warms and escapes.
Innovation is also coming to the fore. Helium startups can be more nimble than industrial gas majors because they can focus on new, smaller-scale extraction technologies and specific high-growth markets that are less economical for large players– though the majors possess significant market pricing power, established long-term contracts, and diversified supply sources. Air Liquide is from other regions, which may impact startups domestically.
Listen:
Leverage government support
Startups are aligning with US-led initiatives aimed at building local supply chain resilience, potentially benefiting from offtake guarantees from the Department of Defense or other government agencies.Startups could benefit from the CHIPS and Science Act primarily through indirect demand-driven growth and funding for advanced manufacturing technologies. As of early 2026, more than half of the $52bn subsidy fund has been disbursed although future funding remains shrouded in uncertainty under the Trump administration.
