In 1990 Iraq accused Kuwait of stealing Iraq's oil through slant drilling, but some Iraqi sources indicate 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. 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.
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 which finally culminated in an Iraqi invasion of Kuwait.
 Dispute over the financial debt
Kuwait had heavily funded the 8 year long Iraqi war against Iran. By the time the war ended, Iraq was not in a financial position to repay the $40 billion which it had borrowed from Kuwait to finance its war. Iraq argued that the war had prevented the rise of Iranian influence in the Arab World. 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.
 Economic warfare and slant drilling
According to George Piro, the FBI interrogator who questioned Saddam Hussein after his capture, Iraq tried repaying its debts by raising the prices of oil through OPEC's oil...