Argentine President Javier Milei threatened sanctions on oil companies operating near the Falkland Islands, wiping out value at UK-listed explorers within hours. The escalation follows Donald Trump's refusal to confirm U.S. support for Britain in a future dispute over the islands.
Shares in oil explorers tied to the Falkland Islands sank Friday after Milei threatened sanctions on companies drilling near the disputed territory. Rockhopper Exploration fell 10% at the open in London and traded down 9% at 71.1p, a two-month low, while Borders & Southern dropped 15% in early trading.
Sea Lion project caught in the crossfire
Milei called the Sea Lion oilfield a serious danger to Argentina in an overnight televised address, saying: "Argentina will not stand idly by." He added that any further advance on what Argentina calls the Malvinas would be treated as a violation of its national security.
The oil project sits about 220 kilometers (140 miles) north of the Falklands and is co-developed by Rockhopper and Israel's Navitas Petroleum, which plan to begin drilling in the coming months and start pumping oil in 2028. Navitas shares fell 4.5% on the Tel Aviv stock exchange in response.
Trump's ambiguity adds pressure
The dispute comes days after Trump declined to say whether the U.S. would assist Britain in a future conflict with Argentina over the islands, in an interview with GB News. He had previously suggested Washington could revise its neutral stance on Falklands sovereignty if Britain failed to raise its defense spending.
Milei, who has cultivated close ties with Trump, said in his address that the White House was weighing a shift in position because Argentina had shown it could be a valuable ally to Washington in the coming decades.
Britain calls its commitment unshakeable
UK Defense Minister Wes Streeting dismissed the speech as more revealing of Argentina's domestic politics than of the islands' status, and said Britain's commitment to the Falklands remains absolute, noting islanders themselves choose to remain British. Britain has controlled the Falklands since 1833, and the two countries fought a brief war over the territory in 1982.
Sources: The Guardian, CNBC
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