Following the discovery of oil in the North Sea in 1965, Hugh Gaitskell's Labour government discovered that they did not need to annihilate the defence budget to pay for the planned improvements in public services. By 1968 the UK was well on the way to being a major oil producer and exporter. Major defence projects could still go ahead and Britain could still field a nine-carrier fleet.

Oil was also struck in the South Atlantic in 1973. Both Argentina and the UK sought to exploit this, the latter operating a number of small wells on West Falkland. Britain was able to use oil from both sources to fend off both the economic and energy crisis's of the 1970s (Gaitskell was able to threaten coal miners with what the prospective Heath government would do to them with the new oil coming in). After the coup, the Argentine Junta sought to use this oil revenue for their own ends. This culminated in an impressive 1979 deal with the USA. In return for all Argentina's oil exports for the next five years, the USA would donate three redundant Essex-class aircraft carriers, a number of ex-US F-8 Crusaders, F-4E Phantoms, A-4's and F-111A's, along with full support. This deal would have even secured Carter a second term, had the Tehran Embassy affair not gone so disastrously wrong.

The men in Whitehall were not worried: after all, why should they be? Buenos Aires had increased the number of Type 42 destroyers it wanted, so business was looking up. No threat to British interests was perceived.

Things were different below the equator, however. The Argentine people had wanted more out of the new oil find than the Junta's new toys. This, combined with the multiple disappearances of dissidents prompted a massive anti-government movement in Argentina. Oil workers went on strike, only for the ringleaders to be publicly beaten and even shot by army troops. This strike, combined with the Reagan administration's greater demands for crude, created panic. The other purchases made by the Junta (more Mirages and Super Etendards) had been on credit. Dassault now demanded payment. This led General Galtieri to plan a way of both meeting the American demands and mollifying his own people: Las Islas Malvinas. A full invasion was planned for September 1982, in order to take advantage of the spring weather. However, Margaret Thatcher came to power in 1980 and the Junta hadn't reckoned on both her resolve and her relationship with President Reagan.

The rival forces' main strike capabilities stack up in this way:

Argentina
FAA:
40 F-4E Phantom II
35 Mirage IIIE
40 IAI Nesher/Dagger
50 A-4B/C Skyhawk
24 F-111A
Approx. 120 Pucara
CANA:
40 F-8E Crusader
20 Super Etendard
30 A-4C
Carriers: 3 ex-US Navy Essex-class [Almirante Brown, Juan Peron and
General Galtieri]; 2 ex-Royal Navy Colossus-class [Independencia and
Veinticinco de Mayo]
Escorts: 2 modified ex-US Navy Phoenix-class cruisers [General Belgrano
and Nueve de Julio]; 6 Type 42 Batch 1 destroyers modified with MM-38
Exocet; 12 ex-US Navy Fletcher/Sumner-class destroyers, all with Exocet

UK
Royal Navy/FAA:
72 Sea Lightning F.2 [solid nose version]
70 Buccaneer S.3
59 SR.177 Thunderbolt F.5
59 Sea Jaguar S.1A
20 P.1150RN Sea Harrier FRS.1 [based on Invincible and LPH's]
Carriers: 3 CVA-01 [Queen Elizabeth, Furious and Formidable]; 2 Malta-class [Malta and Eagle]; 1 Audacious-class [Ark Royal, with smaller airgroup]; 3 Centaur Class [Centaur, Albion and Hermes]; 1 Invincible-class [Invincible]; 2 Colossus-class LPH [Pioneer and Mars]

RAF:
Up to 140 Vulcan B.3A based on Ascension Island (unrealistic) Possible inclusion of P.1150 Harriers in carrier air wings.

Note: Royal Navy figures based on usual carrier airgroups: 12 Sea Lightnings and same of Buccaneers aboard CVA-01/Maltas, along with 6 each of Thunderbolt & Jaguar. Ark Royal capacity 12 Sea Lightning, 10 Buccaneer, 5 each of Thunderbolt/Jaguar. Light fleets carry 8 Thunderbolt and same of Sea Jaguars. Invincible and LPH capable of carrying approx. 20 Sea Harriers between them. All carriers can carry extra aircraft in overload, but not all able to deploy at once. Any other RAF aircraft (TSR.2, P.1121, Buccaneer etc.) would need to be forward-deployed to Stanley airfield.

The first carriers to deploy were Ark Royal, Furious, Formidable, Hermes and Invincible. They made up the bulk of the strike force. Paradoxically, the older Thunderbolts on Hermes actually had more modern radar than the Sea Lightnings (the F.5 upgrade introduced APG-66). Serviceability had been improved on all aircraft since their introduction into service, but there was still some worry about whether the ships themselves could handle the rigours of the South Atlantic.

The Task Force went into action on October 17th, with Buccaneers and Jaguars following up the Vulcan raids of the night before, attacking military targets across the islands. British fighter crews proved the superiority of both their training and equipment as Sea Lightnings ran rings
round the F-4Es of the FAA. Following the torpedoing of the Belgrano and bombing of the Peron by Buccaneers the Argentine Navy pulled back to port.
Attacks by CANA Etendards and FAA F-111s managed to sink five British ships until SAS teams inserted by submarine managed to destroy the entire spare parts depots for both types, effectively grounding them. Amphibious forces moved in on November 6th. During a period of bad weather the Sea Harriers on Invincible, Mars, Pioneer, Eagle and Formidable proved their worth, as the conventional types were unable to land in the conditions. Despite some fierce resistance and last-dich close-support attempts by F-4s, forces in Port Stanley surrendered on December 9th. Relatively quick repairs and improvement work was carried out on the runway at Stanley, which allowed some aircraft to come ashore. Most of the carriers headed for home, their aircraft following once RAF planes (four each of P.1121 Rapiers, Lightning F.7's and TSR.2 Avengers) took up residence. The Avengers actually managed got in on the act, striking Argentine positions on West Falkland.

The battle for West Falkland was short. Cut off from mainland C-130 supply flights, the conscripted soldiers endured little more than three weeks of bombing and shelling. They surrendered on New Year's Eve 1982, with British troops only having established a beachhead. The final shots of the conflict were fired on January 6th 1983. The Argentine carriers General Galtieri and Independencia sailed towards Stanley and launched an air strike against the British shipping there. Fortunately they were detected by an RAF Rapier and attacked, the few A-4's that got through being shot down by Lightnings. Six months later the Junta was deposed and a formal ceasefire was signed under UN mediation.