Argentina is fighting Britain over 3500 islanders who want to stay British – but at $100 a barrel, the real prize is oil.
The Falkland Islands are once again an international flashpoint.
This time it’s about oil.
And US President Donald Trump.
Argentina’s President Javier Milei set a two-week deadline for the United Kingdom to halt its South Atlantic Sea Lion oil project. That expired this week.
So his government has formally asked the United Nations to intervene under the Convention on the Law of the Sea (UNCLOS).
It has also submitted a “Red Notice” to Interpol seeking the extradition of oil company executives from Israel’s Navitas and its British partner, Rockhopper Exploration.
Britain, for its part, has begun upgrading the islands’ defences and exercising its forces in a renewed show of strength.
The surge in diplomatic brinkmanship comes after the leak of a Pentagon memo in April.
It urged the Trump Administration to withdraw its tacit support for the UK’s territorial claim in punishment for its failure to follow the US and Israel into war with Iran.
The White House’s initial response to the scandal was vague.
It simply acknowledged the “de facto United Kingdom administration”, while insisting its position “remains one of neutrality”.
Then, in August, US President Donald Trump threw fuel on the fire.
“I always review every position. That’s just one of many,” he said when asked about the future of the Falkland Islands in September.
Britain dug in its heels.
“The clear position is: we will stand firm in the face of any threats,” UK Prime Minister Andy Burnham told Mr Trump in a meeting that followed.
“We will defend the right of the Falkland Islanders to self-determination and to remain British. I just wanted the president to know directly from me that’s the clear British position. And he very much understood what I was saying.”
But President Milei upped the ante.
He threatened September’s United Nations General Assembly that Argentina would soon take “matters into our own hands”.
The South American nation of 46 million people disputes Britain’s sovereignty over the more than 700 islands, rocks and reefs that make up the Falkland Islands, and the extensive Exclusive Economic Zone (EEZ) this conveys over the surrounding seabed.
It fought a short but brutal 74-day war after seizing the territory in 1982.
A Royal Navy task force eventually recaptured the islands at the cost of 649 Argentinian, 255 British and three Falkland Islander lives.
Waving the flag
President Milei accuses Britain of the “illegal plundering of our resources”.
“Argentina is not going to sit around waiting for the UN and the international community to live up to their own mandate,” he told world leaders in New York.
“We’re going to take matters into our own hands.”
He went on to accuse the international representative body of being a “useless organisation whose only purpose is to sustain a cast of faintly arrogant parasites masquerading as well-intentioned bureaucrats”.
Buenos Aires accuses Britain of breaching a 1976 UN resolution requiring the two nations to negotiate their way through the territorial dispute and not to change existing circumstances in any substantial way through unilateral actions.
Argentine dictator General Leopoldo Galtieri then did exactly that with his failed invasion attempt.
Now, President Milei is accusing Britain of aggression. Of an economic kind.
It’s a strategy designed to force Interpol and the United Nations to take sides.
And to compel the White House to substantiate its position.
Mr Trump has already telegraphed his attitude.
He dismissed the Falklands as being “a long way away”. He wanted to know why Britain had not contributed “a couple of ships” towards opening the Strait of Hormuz. He suggested the US may not help if Argentina attacked.
“The suggestion that Washington could withdraw its backing for British sovereignty as a diplomatic bargaining chip reveals how dependent the current arrangement remains on wider geopolitical alignments,” argue British international law analysts Vicky Kapogianni and Eric Loefflad.
They warn the deadlock between London and Buenos Aires is unlikely to change.
Access to resources is a hot topic among the Trump Administration.
President Trump has repeatedly expressed his desire to seize Greenland for its riches in rare earths, critical minerals and fossil fuels.
Likewise, President Milei has been spurred to act by the prospect of oil 500km off Argentinian shores.
He insists a major new drilling project in the North Falkland Basin is an “unlawful act”.
He warns he will “not remain indifferent to those who exploit resources under illegal foreign occupation”. Sanctions are being explored against some 60 companies and individuals tied to the project.
Money matters
The Falkland Islands’ future is suddenly up in the air because of “$100 oil, which makes Sea Lion worth fighting over, and an American president who treats longstanding commitments as bargaining chips”.
That’s the assessment of the European-based Modern Diplomacy journal.
But Falkland Islanders are happy with the way things are.
A 2013 referendum on the archipelago’s future pulled a 92 per cent turnout. It voted 99.8 per cent in favour of remaining a British territory. Just three individuals voted against it.
President Milei dismisses this.
“The population was implanted by the occupying power on a territory whose sovereignty is in dispute,” he told the UN.
He did not say what he intended to do with the existing 3500 Falkland Islanders if they were compelled to accept Argentine control.
“Argentina will never relinquish its claim that the island archipelago is an inalienable part of its territory,” the British University of Reading and University of Kent international law analysts state.
“And the UK has no reason to abandon its reasoning that the key issue is what the islanders want – and what they want is to be British. Moreover, any UK government proposing to hand over the Falklands would face an unimaginable backlash.”
But profits override people.
The Falklands Basin project was deemed viable when global oil prices hovered around $US70 a barrel. It’s leapt to above $US100 after the assault on Iran by Mr Trump and Israeli Prime Minister Benjamin Netanyahu failed to produce a quick victory.
Estimates put the Sea Lion field at an initial production of 55,000 barrels a day, rising to 125,000 as it expands.
Project managers hope to start drilling next year.
“At $100, a project that was viable becomes highly profitable, and the planned second phase, aiming for around 180,000 barrels a day by 2030, becomes far more attractive,” Modern Diplomacy explains.
“High prices make Sea Lion worth fighting over for both sides.”
Winds of change
Four Typhoon fighters have been flying simulated close-support missions with 1500 British infantry and reserve troops. Drones have been scouring the skies. The patrol boat HMS Medway ploughs the seas.
Invasion “is not a plan anybody in Buenos Aires is seriously working on. Not outside of the internet forums, anyway,” concludes UK Defence Journal analyst Craig Langford.
It comes down to the resolve of a handful of international leaders.
“Milei’s legal case will probably fail. His political bet — that Washington’s neutrality can be moved — may not.”
Mr Trump has yet to formally announce a policy change.
That could be good. Until he does.
“Other territorial claimants, from Spain over Gibraltar to Mauritius over Diego Garcia, would read [such a] shift as proof that American neutrality is now for sale,” Modern Diplomacy adds.
Meanwhile, Britain’s recent military exercises above and around the Falklands are designed to demonstrate its continued military superiority over Argentinian forces.
But one word from the White House could sink Britain’s Sea Lion project’s economic prospects, or make them soar.
And only mutual compromise can produce beneficial results, the British legal analysts argue.
“Under the UN Convention on the Law of the Sea … every question about resources back into the unresolvable argument over who owns the islands themselves, rather than allowing the resources to be divided on their own merits,” they write.
A solution could look like the 2018 agreement between Australia and East Timor to share sovereignty over a disputed portion of the Timor Sea.
“Rather than continuing to fight over competing claims to the Timor Sea, they agreed through conciliation to a permanent maritime boundary and an equitable sharing of oil and gas revenue.”
Such a mutual understanding would sideline the UN. And Mr Trump.
“The dispute is no longer about the military balance. It is about financing, licensing and diplomatic cover,” Modern Diplomacy concludes.
“In those arenas, US neutrality is worth a great deal. Britain has relied on it for 44 years without having to ask for it. It now has to ask.”