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 US embassy in Iraq, following on from Ms Glaspie's meeting with Saddam Hussein. In addition, one week before the invasion, the Assistant Secretary of State, John Kelly, told the US congress that the US had no treaty obligations to defend Kuwait. According to Richard E. Rubenstein, Glaspie was later asked by British journalists why she had said that, her response was "we didn't think he would go that far" meaning invade and annex the whole country. Although no follow-up question was asked, it can be inferred that what the U.S. government thought in July 1990 was that Saddam Hussein was