The main reason behind the invasion of Kuwait was financial dispute
When the Iran–Iraq War broke out, Kuwait initially stayed neutral and also tried mediating between Iran and Iraq. In 1982, Khomeini openly attempted exporting the Iranian Revolution to Kuwait.
As a result, Kuwait supported Iraq in order to prevent Iranian hegemony in Kuwait. In 1982–1983, Kuwait began sending significant financial aid to Iraq. Kuwait's large-scale economic assistance to Iraq often triggered hostile Iranian actions against Kuwait. Iran repeatedly targeted Kuwaiti oil tankers in 1984 and fired weapons at Kuwaiti security personnel stationed on Bubiyan island in 1988.
During the Iran–Iraq War, Kuwait functioned as Iraq'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 for several economic and diplomatic reasons that culminated in an Iraqi invasion of Kuwait.
By the time the Iran–Iraq War ended, Iraq was not in a financial position to repay the US$14 billion it borrowed from Kuwait to finance its war and requested that Kuwait forgive the debt.
Iraq argued that the war had prevented the rise of Iranian hegemony in Kuwait. However, Kuwait's reluctance to pardon the debt created strains in the relationship between the two 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.
Source - Invasion of Kuwait
Experts also claims several reasons like
1 ) Many westerners believed that Iraq's invasion of Kuwait was largely motivated by its desire to take control over the latter's vast oil reserves. The Iraqi government justified its invasion by claiming that Kuwait was a natural part of Iraq carved off as a result of British imperialism. After signing the Anglo-Ottoman Convention of 1913, the United Kingdom split Kuwait from the Ottoman territories into a separate sheikhdom. The Iraqi government also argued that the Kuwaiti Emir was a highly unpopular figure among the Kuwaiti populace. By overthrowing the Emir, Iraq claimed that it granted Kuwaitis greater economic and political freedom.
Source - Invasion of Kuwait
2) The funds that Gulf countries lent to Iraq were used to buy high tech weapons, high tech weapons that made Iraq one of the largest armies in the world and a force to contend with. "Ironically much of the money and weapons came from the countries that united to fight against him."1 The Gulf countries bankrolled him while the Western nations, who had many defense contractors going out of business because of the end of the Cold War, supplied him with the weapons to fight Iran and later Kuwait and the Coalition. With a large army like his, it would be very easy to defeat the far smaller Kuwaiti army compared to his.
Source - Several Reasons Why Saddam Hussein Invaded Kuwait
The XYZ Affair was a political and diplomatic episode in 1797 and 1798, early in the administration of John Adams, involving a confrontation between the United States and Republican France that led to an undeclared war called the Quasi-War.
Moral diplomacy is the system in which support is given only to countries whose moral beliefs are analogous to that of the nation. This promotes the growth of the nation's ideals and damages nations with different ideologies.
