The pipeline between Ahwaz City and Abadan, site of one of the world's largest oil refineries, was damaged and set on fire on Sunday.
This is the second time the pipeline has been damaged this month. On the night of 7-8 March, firefighters took at least 10 hours to put out a fire that an oil company official blamed on sabotage.
The latest blazed occurred near Om Alghizlan. Officials did not rule out sabotage.
The Abadan refinery has a capacity of 450,000 barrels per day, around 30 per cent of Iran's total refining capacity. Al-Ahwaz produces around 80-90 per cent of Iran's total crude output, representing at least 10 per cent of OPEC's output.
Pipelines in Al-Ahwaz (Khuzestan) were previously bombed in September 2005, temporarily disrupting supplies (click here for story). The regime also claimed in October that it had foiled an attempt to bomb Abadan refinery following major bomb attacks on Ahwaz City (click for story).
Al-Ahwaz (Khuzestan) has witnessed rising anger and despair among Ahwazi Arabs, who are being subjected to a large-scale land confiscation programme accompanied by violent repression, which many regard as a campaign of ethnic cleansing.
Ahwazi tribal leaders, journalists, businessmen, opposition activists, imams, teachers and even a mayor are among those being rounded up and imprisoned and executions have increased dramatically as the regime attempts to stamp out dissent. This has led to a climate of confrontation between the Ahwazis and the regime, with anti-government demonstrations and rioting regularly breaking out in Arab districts and city slums.
Ahwazi Arab tribes have in the past been co-opted by the government and armed to protect oil installations. However, the climate of unrest may have led some members of these tribes to attack the facilities they are employed to protect, using their in-depth knowledge of the pipeline infrastructure.
Nasser Bani Assad, spokesman for the British Ahwazi Friendship Society, said: "In their desperation, the Ahwazi Arabs are beginning to realise that regime could to be brought to its knees if oil supplies are disrupted by a relentless Ahwazi intifada, but the rest of the world will also feel the heat. The question is, will the international community intervene to stabilise the situation in Al-Ahwaz or will it wait until the problems have a direct impact on world oil supply?"