a. To be brutally honest, it might well have to involve an ASB to happen without a really, really early PoD. The West intervened agains the Iraqi invasion because nobody wanted to see Saddam's regional ambitions upsetting the balance of power in the area. Saudi Arabia and the other gulf states were also eager to avoid an aggressive, militaristic Iraq in the region, even one that bolstered the Arab states against Iran.
You'd probably have to go way back, you might even butterfly the US intervention on behalf of the Ba'athists if you want to. Or you could have simply a more US-friendly Ba'ath Party that's going to sell oil exploration and development contracts to US oil companies rather than nationalizing Iraqi oil like OTL. You could probably accomplish this with a Saudi Arabia/Aramco style setup with 50% going to Iraq and the rest going to foreign companies that hold contracts. This might mean a significantly poorer Iraq but possibly one that compensates with favorable levels of American investment and military aid, way better Iraqi military than OTL without those atrocious Soviet air defense systems that cost them dearly in the Iran-Iraq War. Basically it would mean that Iraq is taking a role with the US not unlike Saudi Arabia OTL.
This PoD though would probably butterfly away the Iran-Iraq War which lead directly to the Iraqi invasion of Kuwait, but the closer your PoD is to the actual OTL invasion the more ASB it is. You'd have to be talking about the fact that the USA is willing to completely alienate its ally Saudi Arabia and the rest of the Arab League to allow Iraq to invade Kuwait. I know your topic is "the West" but the Gulf War was a "US leads, Europe follows scenario" as it often is and there's not much to convince me that this TL would change that dynamic in any significant way.
Maybe there would be a really, really bad split between the US and Saudi Arabia following the OPEC oil embargo. OTL the two countries realized they needed each other and patched things up, but maybe US policy wonks decide that the US and the West in general need another ally in the Middle East if the Saudis turn on us again. Maybe the US more extensively bolsters Iraq during the Iran-Iraq War and even intervenes on its behalf so that Iran stops disrupting Persian Gulf trade. In that scenario the US might well find it has a friend for life in Saddam so it gives Iraq a free hand in getting its revenge on Kuwait for overproduction of its oil resources.
b. ITTL we're going to probably have a worse Middle East overall. Nations would be joining, either by force or by dissatisfaction with the status quo, the pro-Iraq camp or the pro-Arab League camp. The Arab League itself might fragment as an organization and become a useless rubber stamp in the worst case scenario. There'd probably be at least one war against Iraq or a more indirect proxy war fought between the two factions, either way you'd get fairly periodic supply shocks resulting in recession for the rest of the world. The US and the West would have much larger garrisons in the Middle East to keep the peace in a region that's basically a simmering pot waiting to boil over.