A prolonged conflict in the Middle East could impact the semiconductor industry’s access to key materials while rising costs could hit demand for chips that have been central to the artificial intelligence boom, analysts warned.

The U.S.-Israel war with Iran has shone a spotlight on the role countries in the Middle East play in the complex and intricate semiconductor supply chain.

Semiconductor stocks were caught in the sell-off seen in equity markets before President Donald Trump said on Monday that war will end “very soon.”

Memory chipmakers SK Hynix and Samsung have been hit particularly badly with more than $200 billion wiped off their combined value since the start of the war, even with both stocks rallying sharply on Tuesday. The VanEck Semiconductor ETF is down about 3% since the start of the war paring some losses after a 3.6% jump on Monday.

“A prolonged regional conflict could potentially disrupt chipmakers’ manufacturing operations regarding sourcing materials like Helium and Bromine,” Ray Wang, memory analyst at SemiAnalysis, told CNBC.

“For now, the impact appears to be limited. However, a prolonged conflict could eventually lead to disruptions or require adjustments in the sourcing of key materials.”

A South Korean lawmaker warned last week that the Iran war could hamper access to key materials from the Middle East such as helium, Reuters reported. The lawmaker also warned a prolonged conflict could lead to higher energy prices.

So, what exactly is the role of certain countries in the Middle East in the semiconductor supply chain?

Qatar produces over a third of the world’s helium supply, according to the U.S. Geological Survey. Helium is used in the manufacturing process to transfer away heat. It is also used in areas like lithography, which is key for printing the intricate circuitry of a chip. There is no viable alternative to helium.

In 2023, the Semiconductor Industry Association warned that if the supply of helium were to be disrupted, “there would likely be shocks to the global semiconductor manufacturing industry.”

Not only is production an issue. Transportation of the element out of the Middle East could become increasingly difficult with the effective closure of the crucial Strait of Hormuz shipping route.

More than 25% of the world’s helium supply would be taken off the market by an extended shutdown of the Strait of Hormuz, Phil Kornbluth, president of Kornbluth Helium Consulting, told CNBC.

Qatar’s state-owned QatarEnergy produces helium as a byproduct of liquefied natural gas (LNG). QatarEnergy’s Ras Laffan Industrial City was hit by an Iranian drone attack last week, taking the site offline.

Kornbluth said it “is getting hard to imagine” that the world is not looking at a “minimum” two-to-three month shutdown of helium production and a four-to-six month period before the helium supply chain “returns to normal.”

Bromine is another element in focus and is a key part of the semiconductor manufacturing process. Around two-thirds of the world’s bromine production comes from Israel and Jordan, according to the USGS.

“There is modest risk to critical materials. Helium is the main one we are watching. Qatar is one of the largest sources of Helium. Canada and the United States are also large suppliers,” Peter Hanbury, partner in Bain & Company’s Technology practice, told CNBC.

Rising energy costs could also impact the semiconductor industry. That’s because so much of semiconductor demand, from Nvidia‘s graphics processing units to the memory chips products by Samsung and SK Hynix, are designed for data centers that are training and running huge AI models.

Because of the huge demand for AI and the hundreds of billions of dollars being poured by hyperscalers into building infrastructure, the world’s supply of memory chips has been funnelled into these projects. This has created a shortage of memory and an unprecedented price rise of these chips.

Analysts warned on Monday that there was no precedent for the surging price of oil, as the Middle East crisis deepens fears of prolonged production shut-ins and disruption to shipments through the strategically vital Strait of Hormuz.

Oil prices were on track for their biggest-ever jump in a single day on Monday, before significantly paring gains, following a fresh wave of U.S. and Israeli strikes across Iran over the weekend. Oil depots were among the targets.

International benchmark Brent crude futures with May delivery traded 12.8% higher at $104.53 per barrel on Monday morning, while U.S. West Texas Intermediate futures with April delivery were last seen nearly 12% higher at $101.76.

Brent futures had climbed as high as $119.5 per barrel earlier in the trading day, while WTI hit a session high of $119.48.

Neil Atkinson, former head of oil at the International Energy Agency, said the effective closure of the Strait of Hormuz is something energy markets had never seen before. Unless something changes very soon “we are in a potentially game-changing and unprecedented energy crisis,” he told CNBC on Monday.

Countries across the oil-rich Middle East region have started to scale back crude output. Iraq and Kuwait have already begun to shut-in production, with analysts warning that the United Arab Emirates and Saudi Arabia may also be vulnerable if the Strait of Hormuz remains closed for a sustained period.

“Though there are oil stocks around the world, the point is that if this closure of the Strait persists, those oil stocks if they are deployed will be depleted and we are going to be in a situation where, with the oil production actually shut in, in Iraq and possibly in Kuwait and maybe even in time in Saudi Arabia, that we are going to be in a crisis the likes of which we have never seen before,” Atkinson told CNBC’s “Squawk Box Europe.”

Asked what this could mean for oil prices, Atkinson replied: “Sorry, we are getting into the realms of educated guesswork here. I mean, there is no precedent for this. The sky is the limit.”

Typically, about 20% of the world’s oil and gas passes through the Strait of Hormuz, but shipping traffic has all but halted through this key maritime corridor since the war started.

Oil prices came off their session highs on Monday shortly after the Financial Times reported that finance ministers from G7 economies would hold an emergency meeting on Monday to discuss a possible joint release of petroleum from reserves coordinated by the IEA.

The U.K.’s Treasury and French government confirmed to CNBC that the call would take place on Monday.

Tyler Goodspeed, chief economist at ExxonMobil, told CNBC’s “Squawk Box Europe” on Monday that it had been “consensus last week, and to a certain extent still today,” that everyone but Russia had “an interest in normal traffic resuming through the Strait of Hormuz.”

He added the consensus had been that there was “abundant oil on the water and some strategic reserves to cover any short-term gap.” Goodspeed said he was skeptical of this view as the conflict enters its second week.

“When I think of the probability distribution of possible outcomes here, it seems to me there are many more scenarios, and more probable scenarios, in which the strait remains effectively closed harder for longer than there are scenarios in which normal traffic resumes,” Goodspeed said.

Analysts at Societe Generale, meanwhile, warned that prolonged production shut-ins from Middle East countries “materially increase” the risk of restart complications.

“The UAE is likely the next producer at risk of shutting in output, potentially within the next five to seven days,” the analysts said in a research note published Monday.

“Qatar is also vulnerable, though its oil volumes are modest relative to its LNG exposure. Saudi Arabia faces less immediate risk but shut ins would become plausible if the Strait of Hormuz remains closed for a further two to three weeks,” they added.

— CNBC’s Holly Ellyatt contributed to this report.

Energy Secretary Chris Wright said oil and gas prices will begin to fall when the U.S. begins to knock out Iran’s ability to hinder tanker traffic through the Strait of Hormuz, as Americans weather spiking gas prices due to the war in Iran.

“The plan is to get oil and natural gas and fertilizer and all the products from the Gulf flowing through the straits before too long,” Wright said on Fox News Sunday. “We’re massively attriting their ability to strike with missiles and drones, and that rate of attrition will increase in the coming days. So we’ll be cautious, we’ll be careful, but energy will flow soon.”

President Donald Trump was elected to a second term in the White House in part by promising to lower gas prices and defeat high inflation. He has frequently touted lower gas prices ahead of the November midterm elections, which will determine control of Congress for the remainder of his term.

But gas prices and oil have spiked since the war began in Iran, with vessel bottlenecks in the Strait of Hormuz causing the surge. About 20% of global energy supply moves through the strait.

Gas has jumped to over $3.46 per gallon on average in the U.S., according to GasBuddy. U.S. crude oil has soared to more than $91 per barrel, and the global benchmark Brent crude has spiked to over $92 per barrel.

Wright said that “one large tanker has already gone through the straits with no issues at all.” Typically, roughly 100 tankers and cargo ships move through the strait every day.

Wright said the disruption would last for “weeks, certainly not months.”

“We believe this is a small price to pay to get to a world where energy prices will return back to where they were,” Wright said. “Iran will finally be defanged, and now you can see more investment, more free flow of trade, less ability to threaten energy supplies.”

When asked about potentially tapping the U.S. Strategic Petroleum Reserve to reduce pain at the pump, Wright suggested such a move is not necessary yet. In the past, the SPR has been tapped to mitigate disruptions in oil flows.

“We’re more than happy to use [the SPR] if needed,” Wright said on CBS’s “Face the Nation.” “But … it’s a logistics issue, where do they need oil? They need oil at refineries in Europe and in Asia.”

Trump has also downplayed the option of tapping the SPR.

“We’ve got a lot of oil. Our country has a tremendous amount,” Trump told reporters aboard Air Force One on Saturday. “There’s a lot of oil out there. That’ll get healed very quickly.”

WATCH: No traffic will flow through Strait of Hormuz until a resolution with Iran: Kpler’s Matt Smith

November’s midterm was always supposed to be about affordability. Then, the bombs began falling in Iran.

The expanding U.S. war in the Middle East threatens to scramble the cost-of-living narrative that has so far defined the contest for control of Congress. The election, now less than eight months away, will determine whether President Donald Trump retains his iron grip on Washington or spends his last two years in office fending off Democratic congressional majorities.

Both parties have sought to capitalize on kitchen-table issues, as Americans struggle to keep up with the rising costs of ordinary goods and services. The war in Iran now threatens to exacerbate those concerns — and Democrats are seizing on the opportunity to pillory Trump and Republicans for beginning a conflict that could make life even more expensive for ordinary Americans.

“Because there was no plan going in, I think there will be lots of things that are unforeseen consequences of this,” Sen. Martin Heinrich, D-N.M, the top Democrat on the Senate Energy and Natural Resources Committee, said in an interview with CNBC. “I mean you saw how much gas has gone up in a day, oil futures have gone up, there are going to be a lot of knock-on effects.”

Some of those knock-on effects have already been evident. U.S. crude oil has jumped past $90 per barrel, up from $67 the day before the war broke out. The global market index Brent has skyrocketed to more than $90 per barrel. That’s caused gas prices to spike to about $3.38 per gallon, according to a national average from Gasbuddy, up more than 35 cents from the week before the war.

Rep. Jared Huffman, D-Calif., the ranking member of the House Natural Resources Committee, was quick to point out in an interview that liquefied natural gas prices have also spiked. Though U.S. increases have been modest so far, global LNG supply has been squeezed by a shutdown in Qatar — one of the world’s top LNG-producing countries. Natural gas is the largest electricity generator in the U.S., which is critical as the booming data center industry stresses the electric grid and increases utility costs.

“I think what American families have been feeling most acutely for the past year-plus is their energy bills, their utility bills rising,” Huffman said. “A big part of the utility bill increase is that natural gas is getting more and more expensive … a lot of our effort has been pushed into LNG exports instead of strategies that would lower bills for American consumers. That problem is only more amplified by this conflict.”

But a quick operation in Iran is far from certain, and any extended conflict could create an election-year quagmire for Republicans, said Brittany Martinez, executive director at Principles First and a former aide to then-House Speaker Kevin McCarthy, R-Calif.

“If energy prices rise or markets stay volatile, affordability becomes a harder message for Republicans to carry cleanly,” Martinez said. “Republicans will argue that projecting strength abroad prevents greater instability, while Democrats will try to link any sustained price increases to foreign policy decisions. The real question is whether this turns into a prolonged conflict that voters feel in their household budgets.”

Many believe the military intervention in Iran has the potential to drag on, including Sen. Andy Kim, D-N.J., a national security advisor in the Obama White House.

“This administration doesn’t seem to think about this at all,” Kim said when asked about a potential power vacuum keeping the U.S. in the region longer. “The intelligence community has done a whole range of assessments that very much keep me up at night, and the fact that this White House, I assume, read the same things I read and still went through with this, I just find that to be absolutely reckless.”

Complicating matters more for the GOP is that the war in Iran is unpopular. A CNN poll released March 2 found that nearly 60% of those surveyed disapproved of the U.S. taking military action in Iran. That comes as Trump’s economic approval remains underwater: A Fox News poll released March 4 found that 61% of voters disapproved of Trump’s job on the economy.

“We don’t see it as an opportunity, but I do think it’s our responsibility to tell the American people exactly the decision that Donald Trump is making,” said House Democratic Caucus Chair Pete Aguilar, D-Calif. “He’s sending billions of our tax dollars to the Middle East for another war while he’s kicking people off of healthcare and … eliminating nutrition programs.”

Rep. Zach Nunn, an Iowa Republican seeking reelection in a district Cook Political Report with Amy Walter has labeled a “toss up,” said he is not concerned the war could drown out the GOP’s affordability message. He pointed to the sprawling tax and spending bill that was signed into law last year, increased domestic energy production, and housing legislation that advanced out of the House last month as examples of things the party will use to show action on rising costs.

War in the Middle East does not necessarily preclude Republicans from continuing to try to bring prices down, he argued.

“A more fulsome conversation would be, how do we make sure that we still deliver on affordability?” Nunn said in an interview. “I think this is the absolute right spot for us to be in.”

But Trump, the “America First” president who campaigned on ending the U.S.’s foreign entanglements, risks alienating his base with his Iran offensive. Democrats see the war as evidence of what they have been telling voters about Trump all along: he does not care affordability.

“We have a president who has campaigned on ending forever wars, and he has jumped into war without justification or explanation to the American people,” said Rep. Suzan DelBene, D-Wash., chair of the Democratic Congressional Campaign Committee. “So this has been broken promise after broken promise. This has been at the expense of the needs of everyday Americans. And I do think voters will hold them accountable in November.”

President Donald Trump said in a social media post on Friday that there would be no deal to end the U.S. war against Iran without an “UNCONDITIONAL SURRENDER” by Iran.

The Dow Jones Industrial Average dropped more than 900 points, or nearly 2%, after Trump’s demand, which he wrote on Truth Social. The S&P 500 and Nasdaq Composite fell 1.6% each, and oil futures prices rose.

Trump said that after a surrender and “the selection of a GREAT & ACCEPTABLE Leader(s), we, and many of our wonderful and very brave allies and partners, will work tirelessly to bring Iran back from the brink of destruction, making it economically bigger, better, and stronger than ever before.”

“IRAN WILL HAVE A GREAT FUTURE. “MAKE IRAN GREAT AGAIN (MIGA!)” Trump wrote.

Trump’s demand came as Iran has yet to pick a leader to replace Supreme Leader Ayatollah Ali Khamenei, who was killed last weekend in an airstrike at the beginning of the war by the U.S. and Israel.

White House Press Secretary Karoline Leavitt, when asked by reporters later about potential future leaders of Iran, said, “I know there are a number of people that our intelligence agencies, that the United States government are looking at, but I won’t get any further.”

Trump in June made an identical demand of “UNCONDITIONAL SURRENDER” by Iran in another social media post as he considered launching a military strike against that nation.

The futures price of the global benchmark Brent crude oil rose, breaking $90 per barrel, after Trump posted his latest demand for Iran to surrender without conditions.

Qatar’s energy minister, Saad al-Kaabi, warned Friday that rising oil prices due to the war against Iran “could bring down the economies of the world.”

Al-Kaabi told The Financial Times that crude oil prices could hit as high as $150 per barrel within weeks if tankers cannot pass through the Strait of Hormuz. The last time oil topped $100 a barrel was when Russia invaded Ukraine in 2022.

Oil prices rose on Friday morning as investors continued to assess the impact of the U.S.-Iran war on global energy markets.

By 6:58 a.m. ET, global benchmark Brent crude futures added 4.5% to trade at $89.23 a barrel, notching a fresh 52-week high and levels not seen in nearly two years. U.S. West Texas Intermediate crude futures were last seen 6.3% higher at $86.06, hitting their highest level since April 2024.

Prices dipped overnight as investors continued to assess the impact of the U.S.-Iran war on global energy supply.

Crude prices are on track for their biggest weekly gain since Russia’s full-scale invasion of Ukraine in early 2022.

The spike comes as the U.S.-Iran conflict spreads across the Middle East, disrupting energy production and bringing traffic in the Strait of Hormuz, a critical shipping route, to a near standstill.

On Friday morning, the Financial Times reported that Qatar’s energy minister said the war in the Middle East could see Gulf energy exporters stop shipments within days. Saad al-Kaabi told the FT that crude prices could reach $150 a barrel in the coming weeks if oil tankers were unable to pass through the Strait of Hormuz.

Prices briefly dipped overnight after the U.S. issued a 30-day waiver to India — the world’s third-largest oil importer — to resume purchases of Russian oil. Washington had earlier imposed 25% “penalty” tariffs on India for buying Russian crude, which were revoked last month. The retreat in prices also came after news agency Reuters, citing an unnamed White House official, reported that the U.S. Treasury is planning to announce measures to curb energy price spikes, including potential interventions in the oil futures market.

The average price for a gallon of regular gasoline jumped nearly 27 cents since in the week to Thursday to $3.25, according to data from U.S. travel organization AAA.

The conflict between Iran and the U.S. enters its seventh day on Friday. In a press conference on Thursday, U.S. Defense Secretary Pete Hegseth said the U.S. had “only just begun to fight.”

“Iran is hoping that we cannot sustain this, which is a really bad miscalculation,” he told reporters.

“There’s no shortage of American will here … If you think you’ve seen something, just wait. The amount of combat power that’s still flowing, that’s still coming, that we’ll be able to project over Iran is at multiples of what it currently is right now when you add up our capabilities and those of the Israeli Defense Forces.”

“Contrary to what consensus thinks, I think higher energy prices could actually be deflationary for the U.S.,” Atakan Bakiskan, chief U.S. economist at Berenberg, told CNBC’s “Squawk Box Europe” on Friday.

The conflict in the Middle East is rapidly expanding across the region as the U.S. and Israel-led war with Iran enters its sixth day.

Images published Thursday showed destruction across Tehran after nearly a week of strikes on Iran’s capital.

Iran has retaliated by launching a wave of missiles and drones at Israel, as well as targeting U.S. allies in the region.

Explosions have been reported in Qatar and Bahrain, while oil-rich Azerbaijan said it was attacked by two Iranian drones and Tehran claimed naval fighters had struck a U.S. tanker in the north of the Persian Gulf.

U.S. President Donald Trump has said the Iran war could last for four to five weeks but warned the campaign could also “go far longer than that.”

“Cuba’s next,” said Sen. Lindsey Graham, a Republican and ally of U.S. President Donald Trump, after the U.S. and Israel began strikes on Iran.

The U.S. has imposed an oil blockade on the communist-run island nation since January, shortly after its ally and a key provider of oil, Venezuelan President Nicolás Maduro, was seized in an extraordinary U.S military operation. It has caused a worsening economic crisis and left Cuba facing its biggest test since the collapse of the Soviet Union.

Now Iran, with which Cuba has a strategic partnership, is under sustained attack. “This communist dictatorship in Cuba, their days are numbered,” Graham told Fox News’s “Sunday Night in America.”

Before the Iran strikes, Trump said he wanted a “friendly takeover” of the island, without giving details. The comments, alongside the U.S. attacks on Iran and Venezuela, have done little to allay growing fears in Havana, experts told CNBC.

A “friendly takeover” could resemble Venezuela in the aftermath of Maduro’s removal, “where you still have an authoritarian regime in power but moving in the direction and at the speed that the US determines,” said Carlos Solar, senior research fellow, Latin American Security at RUSI, a London-based defense think tank.

Solar told CNBC by email that Cuba had lost support from Venezuela and Iran “at a moment of maximum pressure” from the Trump administration.

But he added: “What is unclear is how the US will make the Cuban regime break, forcing Havana to capitulate.”

“We are not seeing the kind of military buildup prelude to operation Absolute Resolve that eventually led to Maduro being captured in January. It could well be that the US approaches Cuba in a totally different way,” Solar said.

A spokesperson for the White House and Cuba’s embassy in London did not respond to a CNBC request for comment.

Cuba’s Foreign Affairs Ministry has called for an end to the Middle East conflict and said it “condemns in the strongest terms” the joint U.S. and Israel attack on Iran on Feb. 28.

Russia recently warned that the situation in Cuba appeared to be escalating after Cuban forces killed four people who were off its coast in a U.S.-registered speedboat.

Trump has also said Cuba’s government poses “an unusual and extraordinary threat” and pledged to impose tariffs on any country that supplies it with oil. The U.S. Treasury said late last month, however, that it would allow the resale of Venezuelan oil to Cuba’s private sector.

The move appeared to reflect a small step to alleviate the island’s acute fuel shortage, which has forced a wave of airlines cut flights to the country. Tourism has long been a significant source of revenue for Cuba’s cash-strapped government.

Par Kumaraswami, professor of Latin American Studies at the U.K.’s University of Nottingham, told CNBC the Trump administration’s strikes against Iran and recent comments about Cuba’s regime had increased the mood of uncertainty and anxiety in Havana.

“Cubans are increasingly concerned about how they will survive in the midst of such global chaos, and the recent violence against Iran will have done nothing to allay their fears,” Kumaraswami said by email.

“At the same time, there are indications that the US administration is negotiating with the Cuban government regarding changes to Cuba’s economy, and this is indeed mirrored by Cuban President Miguel Díaz-Canel’s current focus on economic improvement as the priority,” she added.

Kumaraswami said the “message from Cuba” had been “constant” since the communists came to power in 1959: “Survival will only be achieved through adaptation to the changing geopolitical context.”

Cuba has adopted measures to protect essential services and ration fuel supplies for key sectors. The United Nations has previously warned of a possible humanitarian “collapse” as the country’s oil supplies dwindle.

“Cuba just bought itself a window — but it’s a narrow one,” Robert Munks, head of Americas research at risk intelligence company Verisk Maplecroft, told CNBC by email.

“The operation against Iran removes Cuba – temporarily – from Washington’s sights, as the US administration will be preoccupied with the Gulf campaign in the coming weeks.”

But Munks said he expected Cuba to return to the headlines, adding that the Cuban diaspora in South Florida would apply pressure and Washington has shown it is prioritizing the Western Hemisphere in its remodeled national security strategy.

This report is from this week’s CNBC’s UK Exchange newsletter. Like what you see? You can subscribe here.

It was no surprise, when equity markets first reacted to news of the strikes on Iran, that the U.K.’s FTSE 100 fell by less than all of its major continental European peers.

Accordingly, when QatarEnergy suspended LNG production at the Ras Laffan and Mesaieed industrial cities on Monday, U.K. natural gas futures rose by more than 40%.

UK PM Keir Starmer suffers major blow after his party comes third in key vote. The result in Gorton and Denton, in Greater Manchester, is likely to intensify speculation about Starmer’s position,