The suspects travelling in two vehicles were arrested on Sunday not far from the site of the blast in the desert outside Karbala, 110kms south of Baghdad, said police spokesman Abd al-Rahman Mishawi.
"We are interrogating them to determine whether they were involved in the sabotage," Mishawi said, without revealing the number of suspects in custody.
Teams of firemen were on the scene, escorted by Iraqi police and national guards, to evaluate the damage and start repair work, the police spokesman added.
The targeted oil duct served Iraq's domestic market so the attack had no impact on the country's all-important oil exports.
Iraq's oil industry came under threat on Saturday with the
rupture to a main southern oil pipeline, which caused a fresh fall in exports.
It was not immediately clear if the pipeline had been sabotaged or had sprung a leak.
The rupture was at the site of one of two sabotage attacks last month that effectively halted Iraqi exports for almost a week.