Ba'athist Iraq reducing international oil prices, further weakened the Iraqi economy. In response to this, Saddam threatened Kuwait that, unless it reduced its oil output, Iraq would invade. Negotiations broke down, and on 2 August 1990, Iraq launched an invasion of Kuwait. The resulting international response led to the Persian Gulf War, which Iraq lost. The United Nations (UN) initiated economic sanctions in the war's aftermath to weaken the Ba'athist Iraqi regime. The country's economic conditions worsened during the 1990s, and at the turn of the 21st century, Iraq's economy started to grow again as several states ignored the UN's sanctions. In
Iran–Kuwait relations Arabia, Bahrain and the UAE voiced strong support for the withdrawal, which Kuwait did not join. Kuwait's plans for regional development, including the "Silk City project" that aims to develop the Kuwaiti Islands, includes developing mutually beneficial economic ties with Iran. Iran–Kuwait relations Kuwait has close and friendly relations with Iran. Kuwait describes its relations with Iran as "excellent and historical". Kuwait sided with Iraq in the 1980-88 Iran-Iraq War. According to a declassified 1987 CIA document, Kuwait and Iran were on a "collision course". The document attributes deteriorating relations between the two countries to an increase in Iranian attacks