However, Kuwait, a member of the OPEC, prevented a global increase in petroleum prices by increasing its own petroleum production, thus lowering the price and preventing recovery of the war-crippled Iraqi economy.This was seen by many in Iraq as an act of aggression, further distancing the countries.
However, Kuwait’s reluctance to pardon the debt created strains in the relationship between the two Arab countries.
During late 1989, several official meetings were held between the Kuwaiti and Iraqi leaders but they were unable to break the deadlock between the two.
According to George Piro, the FBI interrogator who questioned Saddam Hussein after his capture (in 2003), Iraq tried repaying its debts by raising the prices of oil through OPEC‘s oil production cuts.
The state of Kuwait was annexed, and Hussein announced in a few days that it was the 19th province of Iraq.
Kuwait was a close ally of Iraq during the Iraq-Iran war and functioned as the country’s major port once Basra was shut down by the fighting.
However, after the war ended, the friendly relations between the two neighbouring Arab countries turned sour due to several economic and diplomatic reasons that finally culminated in an Iraqi invasion of Kuwait.Kuwait had heavily funded the 8-year-long Iraqi war against Iran.The Invasion of Kuwait, also known as the Iraq-Kuwait War, was a major conflict between the Republic of Iraq and the State of Kuwait, which resulted in the seven-month long Iraqi occupation of Kuwait, which subsequently led to direct military intervention by United States-led forces in the Gulf War.In 1990, Iraq accused Kuwait of stealing Iraqi petroleum through slant drilling, although some Iraqi sources indicated Saddam Hussein’s decision to attack Kuwait was made only a few months before the actual invasion, suggesting that the regime was under feelings of severe time pressure .Some feel there were several reasons for the Iraqi move, including Iraq’s inability to pay more than $80 billion that had been borrowed to finance the Iran-Iraq war and Kuwaiti overproduction of petroleum which kept revenues down for Iraq.The invasion started on August 2, 1990, and within two days of intense combat, most of the Kuwaiti Armed Forces were either overrun by the Iraqi Republican Guard or escaped to neighboring Saudi Arabia and Bahrain.