The war in Iran is not only rattling energy markets. It is also undermining a far less visible, yet equally strategic resource: helium. Essential for cooling high-tech equipment, the gas has suffered a supply shock following the halt of natural gas exports from Qatar, which accounts for 34% of global production. The primary distributors are the industrial gas giants: Air Liquide, Linde, and Air Products.

Often associated with party balloons, helium is actually at the heart of numerous critical industries. It stabilizes temperatures in semiconductor manufacturing, enables MRI machines to function, and secures rocket launches. However, it is rare on Earth: trapped in small quantities within certain natural gas deposits, it is a slow process to produce. Supply cannot be ramped up quickly. Consequently, tension is mounting in an already tight market. Industrial players, typically covered by long-term contracts, are turning to the spot market—where prices have more than doubled—to guarantee their supplies. "It is the black swan everyone was dreading," Cliff Cain of Pulsar told the Wall Street Journal.

But is this somewhat excessive?

What is certain is that Iranian strikes damaged the gas facilities at Ras Laffan in Qatar, reducing helium exports by 14% and suggesting years of repairs ahead. Even in the event of a rapid de-escalation, the effects will be long-lasting. Air Liquide warned several days ago that its helium supply would be penalized by the situation.

Nevertheless, the situation is not critical in terms of supply: it is primarily prices that are being affected by the rising risk premium. Bernstein estimates that the risk of disruption for semiconductors remains low thanks to several buffers: significant industrial inventories (up to 6 months), high recycling capacity (75-90%), cavern storage, and the ramp-up of Russian production.

Air Liquide and its helium cavern

"With the situation in the Middle East and the attacks last week on the natural gas field, there is now a helium shortage," Armelle Levieux, Vice President of the Air Liquide Group, conceded to Reuters last week. At this stage, the French giant has reallocated its supply via other geographical zones. For instance, Air Liquide operates 54 production sites dedicated to the semiconductor industry in Taiwan.

Furthermore, the group possesses a "cavern" dedicated to helium storage in Germany. Operational since 2016, it is located in Gronau-Epe (North Rhine-Westphalia). At the time, it was a world first: storage takes place 1,300 meters underground in a salt cavity managed by Air Liquide, where natural brine is used to adjust storage volume. Ten years ago, the group highlighted that it could store "more than a year's worth of its helium supply" there.

Air Liquide generates approximately 2.5% of its revenue from helium (the most exposed group in the sector is Air Products, which derives 7.5% of its revenue from the gas). Bernstein calculated that a 10% increase in helium prices would improve the French group's net profit by 1.1% by year-end, ceteris paribus. This is relatively modest. The research firm notes that the group is structurally well-positioned, notably thanks to strategic storage in German salt caverns, which strengthens its ability to meet customer commitments and capture price increases, particularly on the spot market, even if a large portion of volumes is under contract. A tightening of the helium market is therefore globally positive but marginal for Air Liquide.

Regardless, the French group's defensive qualities and rumors of shortages have benefited the stock since the beginning of the year. The share price has gained 11%, significantly outperforming the Stoxx Europe 600 (-1.9%) and the CAC 40 (-4.6%). Analysts, who are always somewhat uneasy about the stock's valuation, seem to be seizing the opportunity. In recent days, Morgan Stanley and Kepler Cheuvreux have raised their recommendations. Price targets have tightened upward. The average 12-month target from the S&P Capital IQ consensus stands at 196 EUR, with a range of 168 to 216 EUR. The stock is trading this morning at 177.66 EUR, following five consecutive sessions of gains.