The dispute between Iraq and Kuwait over alleged slant-drilling in the Rumaila oil field was one of the reasons for Iraq's invasion of Kuwait in 1990.
Kuwaiti oil well fire, south of Kuwait City, March, 1991
In addition, Kuwait had been producing oil above treaty limits established by OPEC. By the eve of the Iraqi invasion, Kuwait had set production quotas to almost 1.9 million barrels per day (300,000 m3/d), which coincided with a sharp drop in the price of oil. By the summer of 1990, Kuwaiti overproduction had become a serious point of contention with Iraq.
Some analysts have speculated that one of Saddam Hussein's main motivations in invading Kuwait was to punish the ruling al-Sabah family in Kuwait for not stopping its policy of overproduction, as well as his reasoning behind the destruction of said wells.
It is also hypothesized that Iraq decided to destroy the oil fields to achieve a military advantage, believing the intense smoke plumes serving as smoke screens created by the burning oil wells would inhibit Coalition offensive air strikes, foil allied precision guided weapons and spy satellites, and could screen Iraq’s military movements. Furthermore, it is thought that Iraq’s military leaders may have regarded the heat, smoke, and debris from hundreds of burning oil wells as presenting a formidable area denial obstacle to Coalition forces. The onset of the oil well destruction supports this military dimension to the sabotage of the wells; for example, during the early stage of the Coalition air campaign, the number of oil wells afire was relatively small but the number increased dramatically in late February with the arrival of the ground war.
The Iraqi military combat engineers also released oil into low-lying areas for defensive purposes against infantry and mechanized units along Kuwait’s southern border, by constructing several "fire trenches" roughly 1 kilometer long, 3 meters wide, and 3 meters deep to impede the advance of Coalition ground forces.
The military use of the land based fires should also be seen in context with the coinciding, deliberate, sea based Gulf War oil spill, the apparent strategic goal of which was to foil a potential amphibious landing by U.S. Marines.