Argentina delays Jerusalem embassy move over Israeli involvement in oil project near disputed Falkland Islands

Argentina has delayed the planned move of its embassy to Jerusalem following unusual diplomatic tensions linked to the involvement of an Israeli company in an oil project near the Falkland Islands, Israeli news outlet N12 reported on Sunday.

The Falkland Islands in the South Atlantic Ocean remain disputed territory, claimed by both Argentina and the United Kingdom, which defeated Argentina in the 1982 war over the islands.

The tension was reportedly sparked after an Israeli private company, Navitas Petroleum, announced its involvement in a drilling project in the Sea Lion oil field near the disputed area.

Relations between Israel and Argentina have become very close under incumbent Argentine President Javier Milei and Prime Minister Benjamin Netanyahu. Milei has been one of Israel’s strongest international supporters since Hamas' Oct. 7 attack.

During an official state visit to Israel in early 2024, Milei declared his intention to move Argentina’s embassy from Tel Aviv to Jerusalem, Israel’s official capital. At the time, Israel’s then–Foreign Minister Israel Katz praised the Argentine leader as a genuine friend of the Jewish people.

"You are a person of values who is committed only to the truth, no wonder that you chose to immediately come to Israel to support us in the just struggle for the defense of the Jewish people against the murderers of Hamas," Katz stated.

However, the Israeli oil project in the Falklands could potentially cool relations between Jerusalem and Buenos Aires. Navitas Petroleum recently announced that its British subsidiary, Navitas Petroleum Development and Production, will carry out the drilling. The Israeli company also said it will partner with Rockhopper Exploration, a British firm specializing in the Falklands. The local Falklands government has already approved the $1.8 billion project.

Argentina’s Foreign Ministry condemned the Navitas plan, which it described as “unilateral and illegitimate.” The ministry further warned of “potentially irreversible future consequences” in the legal and judicial spheres if the project is implemented. The Argentinean foreign ministry concluded that it views the planned Israeli-British oil drilling project as “the theft of a natural resource that belongs to them.”

Last month, Israel’s Foreign Minister Gideon Sa’ar addressed the controversy by recognizing that the project was planned to be carried out in “an area where sovereignty is disputed between Argentina and the United Kingdom” and that “although this concerns a private company and not an activity in which the Government of Israel is involved in any way, we regret the difficult feelings this has caused in Argentina in this context.”

Sa'ar emphasized the strong relations between Israel and Argentina. 

“Israel has special relations with Argentina under the leadership of President Dr. Javier Milei that are held in deep esteem by the people of Israel,” Sa’ar stated, adding hope that Argentina and the United Kingdom would settle the dispute through diplomacy. 

In a 2013 referendum, an overwhelming majority of the Falkland Islanders voted to maintain its status as a British Overseas Territory and its right to self-determination. However, Argentina rejects this position and continues to claim ownership over the disputed islands.