Argentina’s financial crisis and legal troubles resulting from the contentious 2012 nationalization have worsened as a U.S. judge ordered Argentina to relinquish its 51% controlling stake in state-run oil company YPF on Monday. A $16 billion judgment against Argentina for stealing shares from previous investors is intended to be partially enforced by the ruling.
The request from former shareholders, who were primarily represented by litigation financier Burford Capital, was granted by Southern District of New York Judge Loretta Preska. According to a ruling obtained by The Associated Press, she gave Argentina two weeks to transfer the shares to Bank of New York Mellon Corp., a significant U.S. custody bank.
U.S. judge orders Argentina to give up majority stake in oil company
Due to YPF’s listing on the New York Stock Exchange, the plaintiffs brought the case in the United States. YPF’s stock dropped 5.6% after the decision.
Libertarian President Javier Milei, who has attributed the situation to his predecessor, former President Cristina Fernández de Kirchner, faces both political and economic difficulties as a result of the ruling. During her presidency from 2007 to 2015, she spearheaded the YPF nationalization, which sparked the protracted legal dispute.
“More than 10 years have passed, and we Argentines continue to suffer the consequences of the worst government in Argentine history,” Milei said in an X post. Milei went on to promise “to defend national interests.”
According to Marcelo J. García, Director for the Americas at Horizon Engage consultancy, the ruling highlighted how challenging Milei’s position was. “Control of YPF is important for Milei; that’s why an appeal is the only option for him,” he said. García also said, “The ruling was a reminder for the Milei administration that the country’s problems will not go away just because he blames the opposition for them.”
Judge claims billions in interest and damages
In 2023, Judge Preska determined that Argentina owed $16.1 billion in interest and damages for not issuing a tender offer to minority shareholders following its takeover of the business.
Milei’s administration, which is already having a difficult time replenishing its depleted foreign reserves, would suffer a severe blow if it were to give up the majority of YPF. With its Vaca Muerta shale oil and gas operations in Patagonia, YPF is particularly important to Argentina’s economy.
According to official data, Vaca Muerta produced a record 448,000 barrels of crude per day in May 2025, a 22.5% increase over the same month in 2024. Additionally, YPF recovered from a 2023 loss of $1.3 billion to turn a nearly $2.4 billion profit in 2024. This decision could reverse Milei’s plan to use energy exports to stabilize the economy and lower the deficit.
Featured Image Credit: Fabian; Pexels: Thank You!
