Argentina's Milei renews Falklands dispute and threatens oil sanctions

Argentina's President Javier Milei has ramped up a long-running dispute over the Falkland Islands, reasserting the country's claims over the self-governing British overseas territory and threatening to impose sanctions on oil companies working off the archipelago.

In a nationally televised speech, Milei said overnight that Argentina would "need to recover" the islands, which Argentina calls Las Malvinas, calling on the country to "not stand idly by" and "show a united front to the world," according to Sky News.

Milei also announced plans to impose economic penalties aimed at stopping the development of the Sea Lion oil project, a major offshore oil development roughly 220 kilometers (137 miles) north of the Falkland Islands.

The project, which is co-developed by Britain's Rockhopper Exploration and Israel's Navitas Petroleum, is targeting its first oil in early 2028. Argentina considers the venture an unlawful exploitation of resources in waters it claims as its own.

CNBC has contacted Navitas Petroleum and is awaiting a response. Rockhopper Exploration declined to comment.

Milei's comments came shortly after U.S. President Donald Trump declined to say whether the U.S. would assist Britain in the event of a future conflict with Argentina over the Falkland Islands. In an interview with GB News earlier this week, Trump hinted the U.S. would not back Britain over the islands due to a perceived lack of support for the Iran war.

The U.S. president had previously suggested Washington could revise its neutral position on the Falkland Islands' sovereignty if Britain failed to raise its defense spending.

Milei's speech appeared to mark a significant shift in tone from Argentina's president, who had previously prioritized diplomacy on the issue as he sought to improve ties with Britain.

U.K. Defense Minister Wes Streeting said Friday that Milei's statement "tells us more about domestic politics in Argentina than it does about the Falkland Islands."

In a post on social media, Streeting added: "The Falklands are British because Falkland Islanders choose to be British. Our commitment to the Falklands is absolute and unshakeable."

The Falkland Islands are situated about 500 kilometers east of the southern coast of Argentina. Britain has controlled the islands since 1833. Argentina, which has long claimed sovereignty over the Falklands, fought a brief and bitter war over them against Britain in 1982.