US and Venezuela reach 25-year oil agreement

It apparently grants the US direct governance over a foreign country's sovereign national resources and appears to be wider in scope than the US-led Coalition Provisional Authority's control over Iraq's oil revenues after Saddam Hussein was ousted in an American-led invasion in 2003.

It is unclear whether the Venezuela agreement could face legal and constitutional challenges in the South American nation. The official text of the agreement between Washington and Caracas has not been published.

Henrique Capriles, a moderate opposition lawmaker in Venezuela, said there were many doubts about the agreement because of the "opacity and corruption" of the government.

He said the government needed to explain the legal basis for the agreement under the Constitution and what the Venezuelan people were going to receive from it.

David Goldwyn, president of energy consultancy Goldwyn Global Strategies, told the Reuters news agency there was "no precedent" for the US government entering into a lease to operate Venezuelan oil fields and it was not clear if such a move would violate Venezuela's constitution or its hydrocarbons law.

"It is hard to see how this kind of arrangement would accelerate investment at any material scale," he added, citing Venezuela's political uncertainty, weak power grid, and limited export capacity.

Oil, gas and mineral lawyer Alexander Kuiper told the BBC the deal could be "very significant" but expressed some caution.

"This is definitely a headline to help with oil prices," he said, but added: "What we don't know, is whether or not those reserves turn into actual investment, and how long that investment takes to produce results."

Rachel Ziemba, from think tank The Center for New American Security, said the agreement could help spur job growth and imports in Venezuela, but there were too few details to gauge the impact.

“This is unlikely to have any material impact on global oil supplies in the next month or even the next year,” she told the BBC News Channel.

The Wall Street Journal reported on Friday that US energy firms Chevron and Halliburton were nearing deals to invest billions in overhauling the infrastructure in Venezuela's oil fields, many of which have not been developed.

Venezuela has the largest proven oil reserves in the world - an estimated 303 billion barrels - but production has plummeted since its peak in the late 1990s, in part due to a tightening of controls over its state-run oil firm and US sanctions targeting its main economic lifeline.

Hours after US special forces captured Maduro and his wife, Cilia Flores, in a raid on the Venezuelan capital, Trump said the US would indefinitely control the sale of the country's oil.

He has also claimed the rights to Venezuela's oil after saying that the country had in the past "unilaterally seized and sold American oil, American assets and American platforms, costing us billions and billions of dollars".

His framing of the deal as part of efforts to drive down domestic petrol prices comes as the global price of oil has jumped up significantly as supply via the Strait of Hormuz in the Persian Gulf has effectively been stymied - spurring discontent ahead of the US midterm elections in November.

However, Venezuela's oil reserves are made up of so-called "heavy, sour" oil, which is harder to refine and used for making diesel and asphalt, while the US typically produces "light, sweet" oil useful for making petrol.

Trump has asked US oil firms to invest at least $100bn (£75bn) to restore the country's oil industry.