In an effort to prop up the value of the dollar, Richard Nixon negotiated a deal with Saudi Arabia that in exchange for arms and protection they would denominate all future oil sales in U.S. dollars
We were primarily defending Saudi Arabia, Kuwait being a client state of Saudi Arabia and it was Nixon that made the "deal" not Reagan.
I remember the US asking Kuwait for permission to base equipment on Kuwait soil and Kuwait denying the request. That forced us to bring in huge barges to base the equipment on. So I was pissed when we came to their rescue. But it was Kuwait we were rescuing is was the House of Saud which was Sadams' next target.
it was NOT Kuwait we were