In this study, the interaction effects of closely spaced corrosion defects on the burst capacity of oil and gas pipelines under combined internal pressure and longitudinal compression are investigated by using parametric three-dimensional elasto-plastic finite element analyses. Full-scale burst tests reported in the literature are used to validate the finite element model. It is observed that the interaction effects of diagonally spaced defects on the burst capacity are strongly related to the overlapping portion of the defect width or circumferential spacing between the two defects. The analysis results indicate that the strongest interaction between diagonally spaced defects under combined loads occurs if the defects have zero circumferential separation. The interaction weakens as the defects are more and more overlapped or separated circumferentially. It is also observed that the interaction effect associated with longitudinally or circumferentially aligned, unequal-sized corrosion defects is negligible under the internal pressure only or combined loads.