"The volcano in question is under a glacier," Olafsson said.
"If an eruption happens, there could be flash floods."
Olafsson said heavy cloud cover was preventing scientists from flying over the glacier to determine what precisely is happening and whether the volcano has actually erupted.
Iceland, a nation of 320,000 people, sits on a large volcanic hot spot in the Atlantic's mid-oceanic ridge. Volcanic eruptions are often triggered by seismic activity when the Earth's plates move and when magma from deep underground pushes it's way to the surface.