It’s not just oil – the Iran war is disrupting helium and aluminum resources. Here is the contribution.

I The war in Iran it not only disrupts the global energy market but also threatens the world’s supply of helium and aluminum, important materials used in products such as semiconductor chips, medical devices and other everyday goods.

Qatar, which accounts for about a third of the world’s helium supply, stopped producing helium this month following Iranian strikes on two liquefied natural gas (LNG) facilities owned by state-run QatarEnergy.

Helium is a byproduct of natural gas processing, and attacks on Qatar’s liquefied natural gas facilities mean it could take years to rebuild production lines. Earlier this month, QatarEnergy told Reuters that the attack had destroyed 17% of its LNG export capacity, and that repairs could take three to five years.

Those problems could add to the strain on the global economy beyond the impact of high oil and gas prices, which have so far drawn much attention from consumers, businesses and economists. The lack of helium has been largely ignored because the effects of oil supply constraints have been severe and immediate, with the average price of gasoline on Tuesday hitting. $4 a liter for the first time since August 2022.

“We were so focused on gas supply that we didn’t see the helium shortage,” Vidya Mani, a global supply chain expert and associate professor of business administration at the University of Virginia’s Darden School of Business, told CBS News.

Few countries produce helium, meaning that a disruption from one of those countries could destabilize the global market. The United States is the largest producer, accounting for 81 million cubic meters last year. Qatar, Algeria and Russia are other major producers, but Russian goods are banned under US and European Union sanctions.

Semiconductors and helium

Because helium is a very efficient conductor of heat, making it suitable for rapid cooling, it is important in the production of semiconductors. Chip makers use it to cool wafers – silicon disks printed with small electrical circuits.

Helium is used during the assembly process, where wafer-thin materials are discarded to create transistor structures, said Jacob Feldgoise, an analyst at Georgetown University’s Center for Security and Emerging Technology.

“Helium is an important component of semiconductor production, and most of it comes from the Gulf countries,” Mani said. “Imagine you don’t have chips to power laptops, iPhones and small devices? Everything that has circuitry works on one, and all of that will be damaged if we don’t get helium soon.”

The medical industry also relies on helium to cool the large magnets that power magnetic resonance imaging, or MRI, machines. And the space industry uses helium to clean fuel tanks for rockets, a demand that is expected to grow with more launches by companies like SpaceX and Blue Origin.

Impact on iPhones, AI

Mani said that producers who use helium usually store the gas for more than two months. If those resources start to decline, “You’re going to see a much wider impact,” he said.

Helium suppliers are already telling their US customers, including semiconductor chip makers and electronics manufacturers, to expect shortages and higher prices, industry experts said.

“They’re already getting ‘force majeure’ and allocation letters,” Cliff Cain of Pulsar Helium, a helium exploration and development company, told CBS News. “The results are already being felt.”

He added, “Everything from car chips to iPhones will definitely be affected.”

Because there is no way to increase the supply of helium in the near term, a global shortage of helium will cause production crimps, he added. That could hinder building AI data centers and reduce corporate investment plans, according to Oxford Economics.

“Semiconductor manufacturers have indicated that they will not be able to meet their 2030 production targets,” said Cain. “We have the resources here, but it won’t cover 33% of the global disruption.”

Yvette Connor, risk advisory leader at CohnReznick, a business advisory firm, said the growth of US AI companies could be dampened by a shortage of helium-related chips. “It might reduce their speed, not their power,” he told CBS News.

Aluminum reaches a 4-year high

Prolonged conflict in Iran could also cause shortages of nitrogen and aluminum, which could increase food and packaging costs for American consumers, according to supply chain experts.

About 9% of the world’s aluminum is produced by Gulf countries, and regional disruptions are having an impact, according to Stephen Hare and Sebastian Tillet of Oxford Economics. Aluminum prices this week hit a four-year high.

“Disruption in the region reduces available supply, while rising energy costs increase production costs across the global cost curve. Together, this strengthens market conditions and raises aluminum prices higher,” Hare and Tillet told CBS News.

The shortage of aluminum will have a direct impact on the cost of consumer goods packaging in the near term, Mani said. It is also widely used in the automotive and electronics sectors, which “can expect to see a decline,” he said.