Introduction

This is a follow-up to my previous piece on the economic effects of the Persian Gulf sulfur and urea cutoff. In that piece I argued that the public conversation about the Strait of Hormuz has fixated on crude oil and ignored the other commodities the Gulf supplies: LNG, urea, sulfur and helium. Having covered sulfur and urea, I now take up the remaining two, liquefied natural gas and helium, and follows the damage outward in three rings: the countries that lost supply directly, the industries and exports in those countries that depend on it, and the customers and economies further down the chain.

The two belong together because they come from the same place. Qatar’s helium is extracted from the same natural gas that feeds its LNG trains at Ras Laffan. When Iranian missiles hit Ras Laffan in March and Hormuz closed, the world lost a large share of its LNG and roughly a third of its helium in one stroke. LNG is the bigger economic shock by far; helium is the smaller, stranger one, because a gas most people associate with party balloons turns out to be indispensable to memory chips, MRI scanners and rockets.

My main conclusions are these. The LNG shock has fallen hardest on poor, import-dependent South Asian economies, where it has shut fertilizer plants, idled garment factories and darkened grids, and from there it feeds directly into the urea and food problems I described before. The helium shock has so far been managed through stockpiles and allocation rather than shutdowns, but it has handed the United States a new form of leverage and quietly raised the cost of the AI buildout. And the most lasting effect may be on LNG itself: importers burned once are turning to coal, nuclear and solar, which threatens the long-term case for the very exports that America and Qatar are betting on.

Why LNG and helium matter

LNG

Liquefied natural gas is how gas crosses oceans. For importing countries it fuels power stations, heats homes, supplies industry and, crucially, is the feedstock for ammonia and urea. Gas is also the flexible fuel that balances grids when demand peaks or renewables dip. Countries such as Pakistan, Bangladesh, Taiwan, Japan and South Korea have little or no domestic gas, so LNG is their only option.

About a fifth of global LNG supply passed through the Strait of Hormuz last year, almost all of it from Qatar and the UAE. Qatar alone exported about 81.5 million tonnes in 2025.

Helium

Helium is a byproduct of certain natural gas streams; it cannot be manufactured. It is the only practical coolant for superconducting magnets and other systems that must run near absolute zero, and its small atomic size makes it the standard gas for leak detection. Its critical uses are semiconductor manufacturing (wafer cooling, etching and EUV lithography), MRI scanners, space launches, defense systems, fiber optics, quantum computing and research cryogenics. For most of these, as the US Geological Survey notes, there is no substitute.

Helium is also logistically fragile. It ships as a liquid at about −269°C in specialized cryogenic containers and begins to boil off after roughly 35 to 48 days. That means it cannot be stockpiled at sea or rerouted slowly the way oil can.

The scale of the supply shock

[Table]
| LNG | Helium
Gulf share before the war | About 20% of global LNG supply transited Hormuz; Qatar exported ~81.5 Mt in 2025 | Qatar supplied an estimated 27–33% of world helium, and a larger share of the highest-purity grade
Physical damage | Two Ras Laffan trains (12.8 Mt/yr, ~17% of Qatar’s capacity) damaged; repairs could take four to five years | Production halted 2 March; QatarEnergy has since partially restarted helium output, extent not disclosed
Volumes lost | Qatari exports ~17 Mt in Jan–Jul 2026, down ~65% year on year; cumulative loss ~30 Mt | ~5.2 million m³ a month offline at the peak; about 200 cryogenic containers stranded in the region
Status, Sept–Oct 2026 | Force majeure extended into November/December for buyers in Pakistan, Bangladesh, India and Italy; flows rising but far below prewar | Spot prices up 40–100%; market remains supply-constrained
Replacement | US LNG exports up 26% in Jan–Apr 2026; Flex LNG says US growth has largely offset Qatar’s loss in volume terms | US (~81 million m³/yr) is the main buffer; Russia restricted helium exports outside the Eurasian Economic Union until end-2027
[/Table]

Sources: The National, IENE/Banchero Costa, Edison Group, Exiger, ChemAnalyst, Hydrocarbon Processing. Helium share estimates vary by source between about 27% and one-third.

The headline volume figures understate the damage for one reason: the replacement supply did not go to the countries that lost it. US cargoes flowed largely to buyers who could pay, chiefly in Europe and Northeast Asia. Spot LNG in Asia and Europe is near its highest level since late 2022, with Asian JKM in the mid-$20s per MMBtu and European TTF around $24 in late September, against about $3 at Henry Hub. The countries priced out of that market are the ones that suffered most.

First-order effects: who lost supply

[Table]
Country | Exposure | Observed impact
Pakistan | Qatar and UAE supply ~99% of its LNG; LNG is ~30% of gas supply | No LNG imports for weeks after 3 March; hours-long blackouts; emergency spot tenders; government apologized for outages
Bangladesh | Qatar/UAE supplied 63% of LNG (3.6 Mt domestic fields depleting | Gas deficit widened to ~1,700 MMCFD; 2,000–3,000 MW power shortfall; mall hours cut; households losing piped gas
India | Qatar/UAE ~59% of 26 Mt of LNG imports | Petronet force majeure; industrial gas cut up to 70% in Gujarat; priority to household and transport gas
Egypt | Israeli pipeline gas halted 28 Feb; 24-cargo Qatar LNG deal under force majeure; power 82% gas-fired | Monthly energy import bill rose from $560 million to $1.65 billion; early shop closures and reduced street lighting
Taiwan | Qatar ~1/3 of LNG; gas ~48% of power; only ~11 days of gas inventory | No rationing so far; emergency cargoes from US and Australia; nuclear restarts planned
China | Qatar up to 1/3 of LNG imports | March imports down 21%; Sinopec canceled a terminal expansion; switching to coal
South Korea and Japan | Large LNG importers; Korea took ~65% of its helium from Qatar, Japan ~37% | Paid up for replacement cargoes and helium; Korea restarting six reactors
Europe | Italy’s Edison and others hold Qatari contracts; storage below normal | Storage 70.6% full on 25 Sept, below the five-year average; chemical sector “in full crisis mode”
[/Table]

Sources: ProPakistani/Gastech, Wood Mackenzie, Ittefaq, Argus, CTech, Atlantic Council, IEEFA, TrendForce, Global LNG Hub, Reuters.

Secondary effects: what those countries make

South Asia: fertilizer, garments, ceramics

This is where the LNG shock joins the urea shock I described in my previous piece. Gas is the feedstock for urea, so losing LNG means losing domestic fertilizer production on top of lost Gulf imports. In India, LNG supplied 80% of the fertilizer sector’s gas in 2025; the government intervened to restore supply to fertilizer plants, which is why Indian farmers have been relatively protected. Bangladesh could not do the same. Six of its major urea plants have closed or cut output, and the state-owned Ashuganj plant has been idle for more than a year.

Bangladesh is also the world’s second-largest garment exporter, and garments are about 80% of its export earnings. Hundreds of factories, including textile mills, have cut production or shut down, and knitwear makers have switched to expensive diesel generators. Factories face delayed shipments, penalties and order cancellations. The buyers are mostly European and American apparel retailers; I have not seen reporting that quantifies orders moving to other countries, but the risk is that some of that business shifts permanently to suppliers with reliable power.

In India, the Morbi ceramics cluster in Gujarat, one of the world’s largest tile-making centers, saw gas supply cut by half and some units shut. Glass, petrochemicals and refining also lost gas. Pakistan’s textile industry, its largest exporter, depends on gas-fired captive power and has been exposed to the same outages, though I have not found 2026 export figures.

Egypt: power and exports

Egypt was hit twice: Israeli pipeline gas stopped when the war began, and its Qatari LNG deal fell under force majeure. With 82% of its power coming from gas, it nearly tripled its monthly energy import bill. Egypt is also a significant exporter of urea and other gas-based products to Europe, and in past gas shortages it has shut fertilizer plants first, so its exports are exposed to the same squeeze.

Europe: chemicals and heavy industry

Europe is paying more rather than going without. German wholesale power was about $132/MWh in March, against $48 in the United States. The German chemical federation VCI said its companies were “operating in full crisis mode”; Lanxess is cutting 550 jobs, and smaller firms have frozen hiring. With storage below the five-year average heading into winter, the risk is a second round of industrial curtailment if the season is cold.

Taiwan and Korea: power for chips

Taiwan’s position is the most precarious among advanced economies. Gas supplies nearly half its electricity, Qatar about a third of its LNG, and it holds only about 11 days of gas in reserve. TSMC alone uses almost 10% of the island’s electricity. Taiwan has avoided rationing by buying US and Australian cargoes, but an extended shortage during peak summer demand would force a choice between households and fabs.

Helium: chips, scanners and rockets

Helium supply is allocated by a handful of industrial gas companies (Linde, Air Liquide, Air Products, Messer, Iwatani), and in a shortage they decide who gets it. Medical users are typically served first; research labs, welding and party balloons are cut first. Chipmakers can afford to pay almost any price, because helium is a tiny fraction of wafer cost; their risk is not getting it at all.

South Korea is the most exposed chip producer. Samsung and SK Hynix make about 70% of the world’s DRAM and took about 65% of their helium from Qatar. They signed new long-term contracts with Linde and Air Products, accepted higher prices and expanded recycling, and the Korean government secured about four months of semiconductor-grade supply. TSMC held more than two months of inventory and recycles 80–90% of its helium. No confirmed production cuts have been reported. US fabs, which draw on domestic helium, have been the least exposed.

Beyond chips, MRI scanners each hold about 1,500–2,000 liters of liquid helium and can be permanently damaged if allowed to warm; healthcare accounts for roughly 30% of helium use. Space launch, satellite testing and defense cryogenics are also heavy users.

Tertiary effects: the wider economy

Food security

The LNG shock compounds the food risk I described in my earlier pieces. Lost gas in Bangladesh and Pakistan means less domestic urea, which means more import demand in a market already short of Gulf urea, and lower yields if farmers cannot get it. In Bangladesh the crisis has reached households directly: rural families are switching to wood stoves when piped gas fails.

Electronics and the AI buildout

The helium shortage is unlikely to be the main driver of memory prices, which were already rising on AI demand, but it adds to the pressure. Industry analysts expect scarce high-purity helium to be steered toward high-margin AI memory rather than chips for ordinary consumer devices. The hyperscalers have committed about $650 billion to AI infrastructure this year, and that spending depends on a steady supply of memory from two Korean companies that were dependent on Qatari helium.

The energy transition paradox

The most lasting consequence may be what the shock is doing to LNG demand. Importers that were burned are diversifying away from it:

- India has leaned on coal to protect its grid while accelerating wind and battery projects.

- South Korea is restarting six nuclear reactors; Taiwan, which went nuclear-free in 2025, plans to restart two plants.

- Pakistan received no LNG for weeks, but solar, after more than 46 GW of panel imports since 2022, now supplies about a quarter of its generation, and it has no plans for new LNG-fired plants.

- Vietnam’s Vingroup asked to replace a planned 4.8 GW LNG power project with renewables and batteries; the Philippines is ramping down LNG plans.

- China’s imports fell sharply and Sinopec canceled a terminal expansion.

In the short term this means more coal and higher emissions. In the long term it undercuts the argument for LNG as a reliable “transition fuel,” and with it the investment case for the huge export capacity being built in the United States and Qatar.

The United States: winner with a domestic bill

The United States is the clearest winner on both commodities. Its LNG exports rose 26% in the first four months of 2026, and it is the world’s largest helium exporter and the main source of replacement supply. Industrial gas companies and producers such as ExxonMobil have gained. But Americans are paying part of the bill: residential gas costs were up about 14% from a year earlier and near three-year highs, and lawmakers have begun to question export volumes ahead of the midterms. On helium, the United States sold its Federal Helium Reserve to Messer in 2024, so the strategic buffer that might have stabilized this shortage is now a private commercial asset.

Fiscal strain in the weakest importers

For Pakistan, Bangladesh and Egypt, every replacement cargo bought at spot prices drains scarce foreign exchange. As one Bangladeshi economist put it, relying mainly on imports “is not a viable option because Bangladesh does not have sufficient foreign exchange.” The energy shock is therefore also a balance-of-payments and debt problem for the countries least able to absorb it.

Winners and losers

[Table]
| Most harmed | Relative winners
LNG | Pakistan, Bangladesh, Egypt, India (industry), Taiwan (risk), European industry | US LNG exporters; Australian and other non-Gulf suppliers; coal exporters; solar and battery suppliers
Helium | Korean and Japanese chipmakers (cost), research labs, welding and other low-priority users | US helium producers; industrial gas companies (Linde, Air Products US fabs with domestic supply
Downstream | Bangladeshi garment workers; Morbi ceramics; South Asian farmers; poor households | Garment and tile competitors with reliable power (my assessment nuclear and renewables industries
[/Table]

My conclusions

- LNG and urea are one crisis in South Asia. Gas loss shut the fertilizer plants that might have offset lost Gulf urea imports, so the food risk is larger than either shock alone.

- Replacement supply goes to whoever can pay. Global LNG volumes have been partly made good by US exports, but the poorest importers were priced out. The averages hide the damage.

- Helium has been managed, not solved. Stockpiles, recycling and allocation have prevented chip shutdowns so far, but Ras Laffan’s damage will take years to repair and no major new non-Qatari supply is expected before 2028.

- The United States gains leverage and a political problem. It is now the indispensable supplier of both commodities, while its own consumers face higher gas bills and its helium reserve is gone.

- The war may permanently shrink LNG’s future. Every country that turns to coal, nuclear or solar after this experience is a long-term customer lost.

Indicators I am watching

- Whether QatarEnergy lifts force majeure after December, and the pace of Hormuz transits.

- European storage levels and TTF through the winter; any industrial curtailment in Germany and Italy.

- Taiwan’s gas inventory and any power-allocation decisions affecting fabs.

- Bangladesh garment export data and Pakistani load shedding hours.

- Helium contract repricing in Q4 and the extent of Qatar’s helium restart.

- Congressional moves to limit US LNG exports after the midterms.

Data caveats

Several figures come from trade press summarising analyst work (Wood Mackenzie, Kpler, IEEFA, Gastech) rather than primary data. Estimates of Qatar’s helium share range from about 27% to one-third. I have not found reliable 2026 figures for Pakistan’s textile exports or for Bangladeshi garment orders lost to other countries. Statements about who benefits downstream are my own assessment. Information is current to early October 2026.

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