As a precaution, authorities have ordered thousands of people in the southwestern town of Grindavk to evacuate.
The Icelandic Met Office (IMO) is afraid that enormous amounts of magma (molten rock) are expanding underground and may eventually surface.
In recent weeks, thousands of earthquakes have been recorded near the adjacent Fagradalsfjall volcano.
They have gathered at Iceland’s Reykjanes Peninsula, which had been dormant to volcanic activity for 800 years before a 2021 eruption.
Due to increasing seismic activity, the neighboring Blue Lagoon monument was closed on Thursday. Since late October, more than 20,000 tremors have been registered in southwest Iceland.
The IMO could not rule out a “magma tunnel that is currently forming reaching Grindavk,” according to Iceland’s Civil Protection Agency.
The agency said in a statement on Friday that people needed to leave town but that it was not an “emergency evacuation” and urged them to “remain calm because we have a good amount of time to react.”
“There is no immediate danger imminent, the evacuation is primarily preventive with the safety of all Grindavík residents as the principal aim,” according to the statement.
Except for emergencies, all roads in the town of approximately 4,000 inhabitants are closed to ensure cars can get in and out.
The IMO said in a statement on Friday that “significant changes in seismic activity have occurred,” with tremors heading towards Grindavk throughout the day.
It said that magma had expanded beneath the town and that it was “impossible to predict exactly” whether it would erupt.
“The amount of magma involved is significantly more than what was observed in the largest magma intrusions associated with the eruptions at Fagradalsfjall,” the International Meteorological Organization (IMO) stated.
With roughly 30 active volcanic sites, Iceland is one of the world’s most geographically active regions.
Volcanic eruptions occur when magma, lighter than the solid rock surrounding it, rises to the earth’s surface from deep within it.
Litli-Hrutur, or Little Ram, erupted in the Fagradalsfjall area in July, attracting tourists to the “world’s newest baby volcano.”
The location had been quiescent for eight millennia before eruptions in 2021, 2022, and 2023.