Kuwait Kuwait declined an Iraqi request to forgive its US$65 billion debt. An economic rivalry between the two countries ensued after Kuwait increased its oil production by 40 percent. Tensions between the two countries increased further in July 1990, after Iraq complained to OPEC claiming that Kuwait was stealing its oil from a field near the border by slant drilling of the Rumaila field. In August 1990, Iraqi forces invaded and annexed Kuwait. After a series of failed diplomatic negotiations, the United States led a coalition to remove the Iraqi forces from Kuwait, in what became known as the Gulf War.
Invasion of Kuwait it. Several foreign firms working in the Rumaila field also dismissed Iraq's slant-drilling claims as a "smokescreen to disguise Iraq's more ambitious intentions". On 25 July 1990, only a few days before the Iraqi invasion, OPEC officials said that Kuwait and the United Arab Emirates had agreed to a proposal to limit daily oil output to 1.5 million barrels, thus potentially settling differences over oil policy between Kuwait and Iraq. At the time of the settlement, more than 100,000 Iraqi troops were deployed along the Iraq–Kuwait border, and American officials expressed little indication of decline in tensions despite the OPEC