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Venezuela has agreed to export petrol to Iran, in a sign of closer ties between two of America's most vocal adversaries.

At the end of a two-day visit to Iran, President Hugo Chavez said Venezuela would supply 20,000 barrels of petrol a day to the country.

Iran is a major oil exporter but lacks domestic refining capability.

Iranian leaders expressed support for the Venezuelan socialist leader's anti-American policies.

Mr Chavez has been using Venezuela's oil wealth to counter US influence in Latin America and to boost ties with nations not friendly with Washington.

"Venezuela has agreed to export 20,000 barrels of petrol daily to Iran from October in a deal worth $800 millon (£485m)," he was quoted as saying by Iranian media.

He added: "This amount will be deposited in a fund established in Iran and will be used to finance purchase of machinery and technology from Iran."

During his visit to Iran, Mr Chavez met Iran's Supreme Leader Ayatollah Ali Khamenei, who supports his anti-US stance.

"America's repeated defeats and its declining grandeur and power are proof of an undeniable change in the world," the ayatollah was quoted by state media as saying.

President Mahmoud Ahmadinejad also insisted that US policies in South America are "doomed to be defeated".

"I believe that South America is undergoing a political... >>>