Attackers bombed and disabled a pipeline carrying fuel oil from Iraq's largest refinery to a province north of Baghdad, the oil ministry said on Sunday.
"A bomb attack led to an explosion in the 16-inch pipeline transporting fuel oil from Baji refinery to Nineveh province," said ministry spokesman Asim Jihad.
He said the ministry expected repairs from the blast - which occurred early on Saturday some 390 km (240 miles) north of Baghdad - to take several days.Fleets of trucks were transporting oil to Nineveh, which gets all its domestic fuel via the damaged pipeline.
The attack coincides with growing political unrest, with Sunni Muslims in the western provinces accusing Shi'ite Prime Minister Nuri al-Maliki of marginalising their minority sect.
At least eight car bombs exploded in Shi'ite neighbourhoods across Iraq's capital on Sunday morning, killing at least 26 people.
Attacks against Iraqi energy installations and oil pipelines have declined in recent years as security has gradually improved since the U.S.-led invasion of the country in 2003.
Iraq, OPEC's second largest crude producer, has signed oil contracts with a number of foreign firms to develop its long neglected energy sector.