Major caveat to the following "analysis"/guesswork - I am absolutely NOT a LatAm expert, don't speak Spanish (I'm conversant in British), and have never even been south of Mexico/Caribbean.

Argentina has long claimed/pursued the Falklands, both pre and post '82. The possibility of oil makes it somewhat more interesting, but the occasional noise from the Argentinians about this isn't really new.

In 2010 the US changed policy (sort-of) re the Falklands (territory of our closest ally) -

http://blogs.telegraph.co.uk/news/ni...the-falklands/

That was the Daily Telegraph, but even the Economist was torqued -

http://www.economist.com/blogs/bageh...0/03/falklands

We (the US) were "rewarded", within just a few months of providing what must have been a significant diplomatic coup for the Argentinians, with this -

http://online.wsj.com/article/SB1000...googlenews_wsj

Foreign Minister Timerman was reported to have provided on site supervision.

Though they eventually, and unsurprisingly, sort of backed down -

http://en.mercopress.com/2011/06/16/...military-plane

Foreign Minister Timerman is still around -

http://www.telegraph.co.uk/news/worl...Falklands.html

All of that adds up to, right or wrong, that this is just how the Argentinian govt, at least this one, does business. Plan accordingly.

This will probably calm down at some point (though the president was reelected in 2011, so it's, presumably, not that). As Bill Moore notes, there's always the chance of an accident/miscalculation, so increased tension is unfortunate from that standpoint, but the fact the Falkland Islands are, well, islands (more than a couple of hundred miles offshore, at that), should help mitigate that. And the military balance isn't in question. As others have noted, one SSN, if you're willing to use it, turns it into game over. The AAW destroyer is helpful as well.

Ultimately, whatever the public rhetoric, I doubt a regional power like Brazil or anyone else that matters really wants significant drama over this. Additionally, I suspect there are a lot of ways to quietly twist arms with a country like Argentina, with an economy that's still shaky in some ways since the default of a few years ago. Finally, the UK has horses to trade in the first world, with the EU in flux and lots of other stuff going on.