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The result was a slump in the oil price – as low as $10 a barrel – with a resulting loss of $7 billion a year to Iraq, equal to its 1989 balance of payments deficit.At the same time, Saddam looked for closer ties with those Arab states that had supported Iraq in the war.
Iraq launched Scud missiles against coalition military targets in Saudi Arabia and against Israel.The US remained officially neutral after Iraq's invasion of Iran in 1980, which became the Iran–Iraq War, although it provided resources, political support, and some "non-military" aircraft to Iraq.In March 1982, Iran began a successful counteroffensive (Operation Undeniable Victory), and the US increased its support for Iraq to prevent Iran from forcing a surrender.By the time the ceasefire with Iran was signed in August 1988, Iraq was heavily debt-ridden and tensions within society were rising.Its ruling dynasty, the al-Sabah family, had concluded a protectorate agreement in 1899 that assigned responsibility for its foreign affairs to the United Kingdom.Iraq also looked to increase arms production so as to become an exporter, although the success of these projects was also restrained by Iraq's obligations; in Iraq, resentment to OPEC's controls mounted.
Iraq's relations with its Arab neighbors – in particular Egypt – were degraded by mounting violence in Iraq against expatriate groups, well-employed during the war, by Iraqi unemployed, among them demobilized soldiers.
In order for the cartel to maintain its desired price of a barrel, discipline was required.
The United Arab Emirates and Kuwait were consistently overproducing; the latter at least in part to repair losses caused by Iranian attacks in the Iran–Iraq War and to pay for the losses of an economic scandal.
This was a decisive victory for the coalition forces, who liberated Kuwait and advanced into Iraqi territory.
The coalition ceased its advance, and declared a ceasefire 100 hours after the ground campaign started.
The Gulf War (2 August 1990 – 28 February 1991), codenamed Operation Desert Shield (2 August 1990 – 17 January 1991) for operations leading to the buildup of troops and defense of Saudi Arabia and Operation Desert Storm (17 January 1991 – 28 February 1991) in its combat phase, was a war waged by coalition forces from 35 nations led by the United States against Iraq in response to Iraq's invasion and annexation of Kuwait.