Javier Milei, Argentina's President, speaks at the Buenos Aires Stock Exchange in Argentina on July 16, 2026. —Tomas Cuesta—Getty ImagesArgentina’s President Javier Milei has escalated his country’s claim over the Falkland Islands, a British overseas territory, warning he will place economic pressure by sanctioning oil companies with operations in the area.The Falkland Islands are "Argentine, by history and by right, there is no debate about it,” he said in a nationally televised address Thursday evening.Milei argued the “winds of change blowing around the world” are favorable to Argentina’s long-claimed sovereignty over the South Atlantic archipelago, citing remarks made by his ally, U.S. President Donald Trump, who recently suggested the U.S. would be reviewing its neutrality on the dispute.The Argentine President flagged a planned oil project in the area as a cause for concern. Within the next 18 months, two companies—one British and the other Israeli—are set to start extractions from the Sea Lion oilfield, which lies north of the islands and holds an estimated 1.7 billion barrels of oil. Milei described the project as an urgent threat to Argentina’s sovereignty. "If we do not act swiftly, in a few months they will have the material capacity to access the oil that lies underneath our sea—something that has never happened before,” he said.The Falkland Islands, known in Argentina as “Islas Malvinas,” sit roughly 300 miles from the Argentine coast, and have been a British territory for almost two centuries, but Argentina has never accepted British sovereignty over the area.Vowing to take action, Milei said he plans to send a bill to Congress to strengthen Argentina’s response to what he views as attacks on its sovereignty. Responding to the economic threats, the U.K. government reasserted its “unshakeable” commitment to the archipelago on Friday, with British Defense Secretary Wes Streeting insisting: “Milei’s statement overnight tells us more about domestic politics in Argentina than it does about the Falkland Islands.”“The U.K. supports the right of the Falkland Islanders to develop their natural resources for their own economic benefit, and this is an integral part of their right to self-determination,” a spokesperson for Prime Minister Andy Burnham told TIME. “We continue to have a diplomatic relationship with Argentina, and from our perspective we want to continue to strengthen that.”Here’s what to know about the contentious history of the Falkland Islands and why Milei and Trump’s remarks have sparked concern amid mounting geopolitical tensions. Do the Falklands belong to Britain or Argentina?The Falklands' defense and foreign policy is handled by the U.K., but otherwise it has an internal government of its own. The territory has its own constitution and as of 1983, residents of the islands have been British citizens. In a 2013 referendum, Falkland residents voted overwhelmingly in favor of remaining under British rule. The referendum saw 92% of all eligible voters turn out, with 99.8% of votes being “yes.”“The Falklands are British because Falkland Islanders choose to be British,” Streeting said Friday, pointing to the will of the voters.The first recorded landing on the island was made in 1690 by English naval captain John Strong. Britain took possession of West Falkland in 1765. France and Spain each had settlements on the islands at different times, but Britain re-established control in 1833 and has since administered the islands. “Argentina claims the U.K. took the islands as an act of imperialism in the 1830s, but the remedy to colonial acquisition would be self-determination,” says Marc Weller, programme director of the international law programme at U.K.-based think tank Chatham House.Given the British government’s insistence on Falklanders deciding their future, “it is therefore acting in accordance with the principle of self-determination,” he tells TIME.Under the rule of military dictator Leopoldo Galtieri, Argentine forces attempted to stake a territorial claim in April 1982, sparking a 74-day war that Britain won.Argentina has since continued to claim sovereignty over the islands and the rhetoric has become a unifying issue in the country, experts tell TIME.The issue recently reared its head during Argentina’s victory over England in the semi-finals of the 2026 FIFA World Cup, with some Argentine players holding up a banner reading "Las Malvinas son Argentinas,” which translates to "The Falklands are Argentine.”“The Argentinian nation is easily united behind this claim through the Falkland Islands. It's a rallying point, and it's perhaps no accident that as the present Argentinean government is in a little bit of trouble, that they have rediscovered the issue,” says Weller, pointing towards Milei’s controversial fiscal policies and falling popularity among the public. Argentina's soccer players celebrate a World Cup victory over England with a banner reading "The Falklands are Argentine" on July 15, 2026. —Sebastian Frej—Getty ImagesMilei steps up claim over British territory with sanctions threatMilei has previously ruled out using force to claim the islands, instead pushing for a diplomatic resolution. Still, his newly-announced plans to impose sanctions against oil companies with operations in the area pose an economic threat. The two petroleum firms heading the Sea Lion oil drilling project have already felt the impact of Milei’s proposed sanctions.British company Rockhopper Exploration’s stock value fell by around 10% on Friday morning, with Israeli firm Navitas Petroleum stock value falling by at least 4.5%.“It's an attempt to add some uncertainty, perhaps to inhibit investment,” suggests Weller, adding he’s doubtful any such threats will impact Downing Street’s position on the sovereignty dispute.Argentine President Javier Milei alongside U.S. President Donald Trump at the World Economic Forum in Davos, Switzerland, on Jan. 22, 2026. —Fabrice Coffrini—Getty ImagesTrump says U.S. position on Falklands is under reviewThe dispute over sovereignty remains a tense geopolitical issue. China, for example, has been vocal in its support of Argentina’s claim, encouraging negotiations to take place on the matter.The U.S., meanwhile, has historically recognized the U.K.’s “administration of the islands,” but has maintained a neutral position regarding sovereignty.However, Trump has indicated that the U.S. may be open to reversing that position.The Falklands sovereignty became a talking point in April as the U.S. and Europe drifted on account of Trump lambasting European leaders for refusing to get actively involved in the Iran war.A leaked Pentagon email, which reportedly suggested various ways the Administration could punish NATO allies it believes let the U.S. down, suggested a review of the U.S. position on Britain’s claim to the Falkland Islands, according to Reuters.Earlier this week, when asked if the U.S. position on the islands was under review, Trump told reporters in the Oval Office: “I always review every position. That's just one of many."In an interview with a British broadcast channel that aired on Thursday, Trump did not directly respond when asked if the U.S. would come to the U.K’s aid if Argentina claimed the Falklands.Trump instead pivoted to discuss the Iran war, repeating his claims that the U.K. let him down. “Your country was not there to help me,” he insisted.When approached by TIME, a spokesperson for Burnham said such comments “are a matter for the U.S. President.”TIME has reached out to the White House for comment.Andrew Gawthorpe, a lecturer at Leiden University and an expert in the foreign policy of the U.S., tells TIME a Washington reversal on the issue “would be an enormous defeat for the U.K. diplomatically and a huge blow” to the special U.K.-U.S. relationship.Weller agrees, adding that if any U.S. policy were to go against the territorial integrity of the U.K., then “Britain would have to respond quite strongly.”Trump’s remarks on the Falklands this week could prove difficult for Burnham, who inherited a splintered Washington-London relationship upon replacing Keir Starmer as Prime Minister in July.“On the one hand, Burnham needs to appear like a strong leader,” says Gawthorpe. “But on the other hand, I think he's very aware that he needs to not annoy Trump any more than is strictly necessary.”