Enduring Impact of the Middle East Conflict on the Life Sciences Industry

The element helium is often associated with party balloons and novelty uses. However, the shortage of high-grade helium following the commencement of hostilities in the Middle East on February 28, 2026, presents a significant and underappreciated risk for the life sciences sector. The conflict has created a potentially long-lasting impact on the cost and availability of medicinal products and critical inputs such as helium, which is essential for the operation of certain medical devices.

Three areas of particular concern are: (1) the effect of helium shortages on MRI machines; (2) logistical challenges in securing vital medications and the active pharmaceutical ingredients (APIs), solvents, and other materials necessary for their manufacture; and (3) disruption to clinical trials. Even if the conflict subsides in the near term, life sciences companies are likely to face operational effects for years.

Helium Shortage

The chemical properties of helium are unique, and its role in medical applications is critical. Helium is essential for MRI machines, where liquid helium in its purest form—grade-A helium (≥99.995% purity)—is used to cool superconducting magnets to approximately 4 Kelvin (-269.15°C, -452°F). If supply is interrupted and magnets warm, a “quench” event can occur, potentially resulting in permanent damage to the equipment. At present, there are no widely viable substitutes for helium in this application.

Helium is relatively rare and is produced primarily as a byproduct of natural gas processing, usually at concentrations below 0.5%. Its separation requires cryogenic distillation, a specialized process that is economically viable only at very large scale. As a result, production is concentrated in a small number of global facilities, including those in the United States, Qatar, Russia, and Algeria.

The closure of the Strait of Hormuz disrupted a key export route for Qatari liquefied natural gas (LNG) and associated helium supplies. QatarEnergy reportedly halted operations at the Ras Laffan facility—the world's largest helium producing operation—in early March 2026 and invoked contractual force majeure provisions shortly thereafter. Subsequent damage to infrastructure has further constrained output, with industry estimates suggesting that a meaningful share of global helium supply has been affected.

The disruption is compounded by transport limitations. Liquid helium must be shipped in specialized cryogenic containers maintained at approximately the same temperature noted above for MRI machine operation (4 Kelvin). These containers can preserve helium for only 35–48 days before boil-off occurs. Where shipments have been rerouted, increased transit times reduce effective supply by increasing product loss in transit and raising transportation costs.

In addition, competition for high-grade helium has intensified. Beyond healthcare, helium is a critical input in semiconductor manufacturing, particularly in advanced chip production (e.g., high-demand artificial intelligence processing chips). As a result, healthcare providers must compete with other industries for limited supply.

Accordingly, health systems face increased risk of shortages for MRI operations, even if hostilities ease and production resumes. Due to helium’s storage limitations, stockpiling is not a viable risk management strategy. Providers must rely on continued resupply under increasingly constrained conditions. These constraints also highlight growing exposure to operational interruption and equipment risk, areas that are increasingly being evaluated through both risk mitigation and specialized insurance solutions.

Logistical Concerns for Vital Ingredients and Medical Products

While the Middle East accounts for a relatively small share of global API production, the Gulf Cooperation Council (GCC) region serves as a major pharmaceutical transit hub. The region connects Africa, Asia, Europe, India, and the United States through a dense network of air cargo hubs, seaports, and free-trade zones.

Dubai, in particular, plays a central role in global pharmaceutical logistics. Shipments are frequently warehoused, repackaged, and redistributed through its primary air cargo hub, one of the busiest in the world.

Since the start of the conflict, companies have been forced to reroute shipments, often through less efficient pathways. These adjustments include diverting cargo to alternative hubs, using overland transport between Gulf airports, and shifting to longer maritime routes. As a result, transit times have increased and costs have risen, including higher marine insurance premiums for shipments moving through affected areas.

Generic pharmaceutical manufacturers and biotech companies are especially sensitive to these disruptions. Many operate on thin margins, maintain limited inventory, and depend heavily on manufacturing in India and China. Shortly after the conflict began, disruptions in APIs, excipients, and packaging materials led to delays, increased freight costs, and greater planning uncertainty.

Rising energy prices have further compounded the issue. Petroleum is a key input in pharmaceutical manufacturing, and sustained increases in oil prices raise production costs. Over time, this may affect the economic viability of certain low-margin medications.

Biologics present additional challenges. Products such as vaccines, insulin, and monoclonal antibodies often require strict temperature control and have limited shelf lives. Extended transit times or exposure to variable conditions increases the risk of product degradation.

Regulatory requirements further constrain flexibility. Changes in suppliers, manufacturing processes, or shipping routes may trigger additional regulatory review. In practice, this limits the ability of companies—particularly smaller biotechnology firms—to quickly adapt to disruptions.

From a risk perspective, these dynamics expand exposure across multiple dimensions, including business interruption, contingent supply chain disruption, and product integrity risks during transit—areas that may require reassessment of existing insurance structures and limits.

Supply Chain Impact on Clinical Trials

Disruptions to the distribution of investigational drugs present meaningful risks for clinical trials. These studies typically operate on tightly defined timelines, and delays in drug delivery can affect both trial execution and broader development schedules.

Many investigational products have short shelf lives and require strict temperature control. Transportation delays may render these products unusable, requiring replacement shipments and potentially affecting study continuity.

Clinical trials are also governed by detailed protocols. While some adjustments may be possible, delays or missed patient visits can introduce compliance challenges and may require regulatory engagement or protocol amendments. In certain cases, disruptions may affect data integrity or delay progression to subsequent trial phases.

Clinical trials in several countries in the region have already experienced disruption. For sponsors, these delays can translate into increased costs and extended timelines for bringing new therapies to market. Disruptions may also have implications for clinical trial insurance coverage, including timing-related exposures and potential increases in costs associated with trial interruption or delay.

The Path Forward

It is overly simplistic to suggest that more robust risk management planning alone would have mitigated the impact of the conflict. Life sciences supply chains operate within significant constraints: products are highly regulated, often require specialized handling, and may be costly or time-intensive to replicate.

Traditional approaches, such as maintaining additional inventory, offer only limited protection. For many products, stockpiling is impractical due to shelf-life limitations, cost considerations, and regulatory requirements.

As a result, companies are under increasing pressure to adopt more strategic approaches to supply chain resilience. Potential measures include dual sourcing for critical inputs, enhanced supply chain visibility, and scenario planning to assess the impact of disruptions. Some organizations are also exploring advanced tools, such as digital modeling, to evaluate alternative supply chain configurations.

The recent conflict underscores the broader challenge facing the life sciences sector: balancing efficiency with resilience in a highly constrained operating environment. In parallel, organizations are increasingly aligning operational resilience strategies with risk financing approaches, including insurance solutions designed to address supply chain volatility, transit risk, and business interruption in a more integrated manner.

Conclusion

The Middle East conflict highlights the extent to which global life sciences operations depend on fragile and highly interconnected supply chains. From helium shortages affecting MRI capacity to disruptions in pharmaceutical logistics and clinical trials, the impacts are both immediate and potentially long-lasting.

While near-term conditions may improve, the structural vulnerabilities exposed by the conflict will persist. Addressing these challenges will require a sustained focus on supply chain resilience and more strategic planning.

Authored by: Quinn Muldoon, Berkley Life Sciences, AVP, Territory Manager