Most faults in Iceland strike roughly parallel to the divergent plate boundary, a part of the North American‐Eurasian plate boundary, which would be expected to lead to primarily normal faulting. However, several studies have observed a significant component of rift‐parallel strike‐slip faulting in Iceland. To investigate these fault kinematics, we use the boundary element method to model fault slip and crustal stress patterns of the Icelandic tectonic system, including a spherical hotspot and uniaxial stress that represents rifting. On a network of faults, we estimate the slip required to relieve traction imposed by hotspot inflation and remote rifting stress and compare the model results with observed slip kinematics, crustal seismicity, and geodetic data. We note a good fit between model‐predicted and observed deformation metrics, with both indicating significant components of normal and strike‐slip faulting and consistency between recent data and longer‐term records of geologic fault slip. Possible stress permutations between steeply plunging σ1 and σ2 axes are common in our models, suggesting that localized stress perturbations may impact strike‐slip faulting. Some increases in model complexity, including older hotspot configurations and allowing fault opening to simulate dike intrusion, show improvement to model fit in select regions. This work provides new insight into the physical mechanisms driving faulting styles within Iceland away from the current active plate boundary, implying that a significant portion of observed strike‐slip faulting is likely caused by the combined effects of tectonic rifting, hotspot impacts, and mechanical interactions across the fault network.
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