When the global market runs out of helium: normal supply disruption or force majeure?

Helium is a critical industrial material with a highly concentrated and fragile supply structure. It plays an essential role for example in healthcare, semiconductor manufacturing, aerospace, cryogenics and other high-tech sectors. In many applications, there are no practical substitutes as helium is mainly recovered as a by‑product of natural gas extraction. This intrinsic reliance on natural gas production makes the global helium market particularly vulnerable to geopolitical tensions and operational disruptions.

Recent developments have highlighted the fragility of global helium supply chains. Production is highly concentrated in three major producer countries: Qatar, Russia, and the United States. With Qatar’s largest production facility reportedly damaged due to the ongoing conflict in the Middle East, Russia suspending helium exports for the current year and 2027, and the United States acting as the remaining major supplier, the global helium market will be facing a supply shortage.

China represents a critical exposure point: while it hosts a significant share of global semiconductor and electronics manufacturing capacity, it has no meaningful domestic helium production, making it heavily dependent on imports. Given the just‑in‑time nature of modern production networks, even short‑term helium shortages can lead to immediate production difficulties, downstream delivery failures, and contractual non‑performance. 

These events raise pressing legal questions for market participants, particularly whether supply failures resulting from helium shortages can qualify as force majeure events or similar under commercial contracts.

What constitutes force majeure?

Force majeure refers to extraordinary events such as war, armed conflict, government export bans, sanctions, natural disasters beyond the reasonable control of the parties that make performance of the contractual obligations impossible. When a valid force majeure event occurs, the affected party may be excused from liability, and its obligations may be suspended or postponed, depending on the contract, or it may give the parties a right to terminate the underlying agreement.

Force majeure clauses vary widely, but they generally excuse contractual performance where:

• Performance is prevented or impeded by an event taking place after conclusion of the contract beyond the reasonable control of the affected party;
• The event was unforeseeable (or not reasonably foreseeable) at the time of contracting;
• The effects of the event could not be avoided or mitigated through reasonable efforts; and
• The event is not attributable to the affected party’s own actions.

Another closely related term, with similar effect as force majeure, is hardship. Hardship in turn, refers to a situation in which performance is in principle possible, but would require unreasonably large sacrifices from the seller or would become unreasonably expensive for the seller. Commercial contracts may sometime include clauses that define what is needed for the threshold of hardship being met, and provisions on hardship situations are also included in international contractual law principles.

Helium supply disruptions as grounds for reliance on force majeure or hardship

Putting force majeure in the current context, Russia’s decision to halt helium exports constitutes a sovereign governmental act that is external to contractual parties. Where a force majeure clause includes references to government actions, trade restrictions, or export bans, non‑delivery resulting directly from such measures may fall within its scope. Similarly, physical damage to production facilities due to armed conflict should qualify as a classic force majeure trigger under most clauses that reference war or hostilities. In such cases, the causation link between the event and non‑performance is also relatively straightforward. 

However, some key factors must be assessed in determining whether force majeure relief is available even in these types of situations:

1. Market shortages vs. force majeure

A crucial distinction must be made between a specific external event preventing performance (e.g., export bans and facility destruction), and a general market shortage or price increase. It is generally held that mere scarcity or increased cost does not amount to force majeure, unless the force majeure clause in the contract at issue expressly cover also e.g. supply shortages or raw material unavailability. If a supplier can procure helium from alternative sources, albeit at a higher cost, force majeure relief may not be available. This means that parties relying on force majeure must demonstrate that helium was objectively unavailable, not merely commercially unattractive or prohibitively expensive.

2. Obligation to mitigate

Most force majeure clauses also impose an obligation on the affected party to mitigate the effects of the force majeure event. This may include e.g. seeking alternative sources of supply or drawing from strategic reserves or inventories. If the seller does not take reasonable measures to mitigate the impact of the disrupting event, it may lose the ability to rely on force majeure.

3. Foreseeability 

Foreseeability may also become a key battleground in future disputes. For contracts concluded after visible geopolitical tensions, supply‑chain disruptions, or prior helium shortages, counterparties may argue that the risk of helium shortage was foreseeable. Consequently, the affected party may be unable to rely on force majeure as a defence and may remain contractually liable for its failure to perform.

4. Contracts without a force majeure or hardship clauses

Where a commercial contract does not contain a force majeure clause, the affected party must look to the applicable statutory framework for relief. 

For contracts under Finnish law, Section 23 of the Sale of Goods Act (kauppalaki, 355/1987), which is applicable to sale of goods, provides the primary statutory equivalent for force majeure. According to the provision, the seller is not obliged to perform the contract if there exists an impediment that the seller cannot overcome, or if performance of the contract would require the seller to make sacrifices that would be unreasonable in relation to the benefit accruing to the buyer from the seller’s performance. If the impediment or the imbalance ceases within a reasonable time, the buyer is nevertheless entitled to demand that the seller performs the contract. The grounds for exemption set out in the Section 23 are not defined in detail. The assessment of whether such impediment exists may involve difficult line‑drawing as the force majeure events have not been specified to relevant extent.

Disproportionate sacrifices may also refer to a hardship situation, where performance has become significantly more difficult or more costly than the seller could reasonably have anticipated at the time of contracting. However, the threshold is set at a high level and judged both from the perspective of the seller as well as the buyer. For a seller to be relieved of the duty of specific performance the additional sacrifices required by the seller must be clearly unreasonable in comparison to the benefits obtained by the purchaser from performance. The provisions on hardship situations stem from the general contractual principles, namely the UNIDROIT Principles and the Principles of European Contract Law (PECL). The assessments are always case‑specific, but guidance on the interpretation of the provision may also be drawn from Section 36 of the Finnish Contracts Act and its general adjustment rule.

The absence of a force majeure clause therefore does not render the affected party entirely without protection, but it does introduce considerably greater legal uncertainty than a well-drafted contractual provision would. For parties operating under Finnish-law governed contracts that lack express force majeure or hardship provisions, or where the force majeure provision lacks relevant examples, the current helium supply environment serves as a timely reminder that contractual silence on raw material risk is a vulnerability that careful drafting can - and should address.

Conclusion

Helium supply disruptions have the potential to cause immediate and severe contractual non‑performance across critical industries. Whether a helium shortage constitutes force majeure or a hardship event will ultimately depend on:

• The precise wording of the contract;
• The causal link between the external event and non‑performance;
• The availability of reasonable alternatives; and
• The timing of the contract relative to the known risks.

Moving forward, the parties should consider to:

• Explicitly include or exclude raw material shortages in force majeure clauses;
• Introduce hardship clauses; or
• Allocate helium supply risk through price‑adjustment mechanisms.

The above text is intended solely as a general overview to illustrate the topic. It does not deal with all relevant factors, nor is it intended to constitute legal advice or guidance for action. If you require assistance in assessing contractual exposure or navigating legal issues arising from helium supply disruptions or other non-performance situations, our legal experts are available to support you.