Dubai: Al Houthi fighters and loyalists of Yemen’s President Abd Rabbo Mansour Hadi are locked in a power struggle that diplomats say risks drawing in neighbouring Saudi Arabia and its main regional rival Iran.

The duel between the northern-based Al Houthi militia and the southern backers of the president threatens to erode what remains of a Yemeni state weakened by years of corruption, poor governance and a series of conflicts.

A worst case scenario - sectarian war with foreign powers backing opposing sides - would deepen already grave humanitarian suffering in the impoverished country and endanger strategic shipping lanes.

SECTARIANISM Al Houthis are a Zaydi Islamist militia group which says it has no sectarian agenda. They describe their takeover of much of the country as a revolution for all Yemenis. Sunni Islamist parties and tribes reject this.

Ultra-hardline Al Qaida militants have joined forces with some Sunni tribal opponents of the Al Houthis in months of fighting, and suicide bombings at Al Houthi mosques on Friday claimed by Daesh raised the risk of a sectarian war.

SEA NAVIGATION The threat of war has raised fears over the security of oil supplies through the Bab Al Mandab shipping lane, a vital energy gateway for Europe, Asia and the United States. More than 3.4 million barrels of oil per day passed through Bab Al Mandeb in 2013, according to the US Energy Information Administration.

Closure of the strait, which connects the Red Sea with the Gulf of Aden and the Arabian Sea, could keep tankers from the Gulf from reaching the Suez Canal or Sumed Pipeline, diverting them around the southern tip of Africa. Egypt has said it could not stand by if its interests were threatened.

SOUTHERN SEPARATISM Southern secessionists say northerners based in the capital Sana’a have discriminated against them and usurped their resources since the unification of North and South Yemen in 1990. Despite leading the North’s war effort in a 1994 North-South civil war, Hadi has been welcomed in Aden since fleeing the capital last month.

The southern Hirak movement has struggled to advance its cause, and some of its armed factions have pledged allegiance to Hadi - a Southerner by birth - hoping that he might advance their dream of an independent South.

ISLAMIST MILITANCY AND AL QAIDA IN THE SOUTH Yemen is the base of Al Qaida in the Arabian Peninsula, one of the network’s most ambitious branches. It has carried out years of bomb and gun attacks on the Yemeni state, plotted to blow up US-bound airliners and claimed responsibility for an attack on a magazine in Paris in January that killed 12.

AQAP has seized parts of the remote south and east, and stands to gain if the Yemeni military continues to split and relent in its military campaign against it.

FOREIGN INVOLVEMENT Weak, impoverished and divided among pliable tribal leaders, Yemen has for decades been susceptible to outside influence.

Saudi Arabia, to its north, has tried to maintain calm by funding allied Islamists and tribal shaikhs. Iran is a newer player, and has trained, armed and funded Al Houthis, Yemeni and Iranian officials have said. Al Houthis deny receiving military training from Iran.

The United States has worried that political instability in Yemen will embolden Al Qaida, and has trained Yemen’s military to fight them while it has kept up a campaign of drone strikes against the militants. But the withdrawal of US diplomatic and military staff from Yemen amid deepening security chaos has called into question their counter-terrorism strategy.

BORDER SECURITY Saudi Arabia, is concerned by Al Houthi presence on its mountainous southern border. Al Houthis held drills on the Saudi border using heavy weapons acquired from the Yemeni army this month, raising tensions with Riyadh. Gulf Arab officials warned this week that Yemen’s security and that of the Gulf was an “indivisible whole”, raising the possibility of a military intervention.

HUMANITARIAN CRISIS The erosion of the central government would worsen already chronic poverty and lack of development in Yemen. Saudi Arabia has suspended most of its financial aid to Yemen, worried that Al Houthis will grab it, Yemeni and Western sources say.

Fighting temporarily displaced around 100,000 people last year, according to the United Nations, but the world body said in February that recent insecurity had not yet curtailed aid operations. Hunger, corruption and lack of basic services, water and infrastructure for Yemenis remain huge problems and over a quarter of a million former refugees, mostly Somalis, struggle to survive in the country.

OIL OUTPUT DANGER Falling oil prices have cut state energy income; oil exports fell to $1.67 billion last year from $2.66 billion in 2013, the central bank says. Yemeni oil flows through the Marib pipeline, its main export route, at a rate of around 70,000 barrels per day (bpd). Before a series of attacks by tribesmen began against it three years ago, the 435 km (270 mile) pipeline carried around 110,000 barrels per day to Ras Isa, an export terminal on the Red Sea. Tribal conflicts and Al Qaida insurgency are disrupting oil and gas exports in other parts of the economy