1990 oil price shock and prices began to fall. On August 2, 1990, The Republic of Iraq invaded the State of Kuwait, leading to a 7-month occupation of Kuwait and an eventual U.S.-led military intervention. While Iraq officially claimed Kuwait was stealing its oil via slant drilling, its true motives were more complicated and less clear. At the time of the invasion, Iraq owed Kuwait $14 billion of outstanding debt that Kuwait had loaned it during the 1980–1988 Iran–Iraq War. In addition, Iraq felt Kuwait was overproducing oil, lowering prices and hurting Iraqi oil profits in a time of financial stress. In the buildup
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