Magma moving through the Earth’s crust deforms the host rock surrounding it, which can translate to geodetically observable deformation of the Earth’s surface. Ground deformation models can therefore provide important information about subsurface processes at active volcanoes. The shape and orientation of propagating magmatic intrusions is strongly affected by the governing stress field, mechanical properties of the crust and pre-existing weaknesses such as faults or fractures. Adequately representing such complexities is important for implementing realistic models, otherwise model output might be biased due to oversimplification. Such models are of great value for example during periods of volcanic unrest, since they can help to constrain the location of magma collecting or propagating in the ground, which is important for hazard assessment. After 800 years of volcanic quiescence, several volcanic eruptions have occurred since 2021 on the Reykjanes Peninsula, which is a subaerial segment of the Mid-Atlantic ridge in SW-Iceland. Volcanism in the area is strongly affected by the tectonic stress field created by oblique plate spreading. Proximity of the peninsula to the capital of Iceland, Reykjavík, and to important infrastructure like Iceland’s main international airport and geothermal powerplants make it important to better understand the interplay of volcanism and tectonics as well as to constrain the rapid changes in the governing stress field due to tectonic stresses being released by magmatic intrusions. We aim to implement multi-step Finite Element deformation models, which first accumulate tectonic stress by simulating plate spreading and then locally release the accumulated stress through the formation of magma-filled fractures called dikes. These models help to understand 1) how the tectonic stress affects the dike-induced surface deformation and 2) how the emplacement of a dike alters the local stress field. Improving our understanding of how the stress field evolves throughout the emplacement of several dikes might help to constrain when activity is likely to move to another volcanic system on the Reykjanes Peninsula and possibly, where it is likely to move to. Furthermore, the contribution of tectonic stress relative to magmatic overpressure as the driving force for dike propagation has important implications for the dynamics in the early phase of a potential subsequent volcanic eruption.