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
United States support for Iraq during the Iran–Iraq War a series of "catastrophic" Iraqi defeats. They had been driven out of Iran, and the Iraqi army looked like it was falling apart." "The Reagan administration feared that Iran's army might slice through Iraq to the oilfields of Kuwait and Saudi Arabia"; Veliotes, then "Assistant Secretary of State for Near Eastern and South Asian Affairs," "outlined a nightmare scenario in which the Iranians invade Iraq, they defeat Iraq, and then head straight for Israel, which is distracted and debilitated by its ongoing adventure in Lebanon." As a result, the U.S. gradually abandoned its policy of neutrality. In February 1982, Iraq