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Understanding and constraining the source of geodetic deformation in volcanic areas is an important component of hazard assessment. Here, we analyse deformation and seismicity for one year before the March 2021 Fagradalsfjall eruption in Iceland. We generate a high-resolution catalogue of 39,500 earthquakes using optical cable recordings and develop a poroelastic model to describe three pre-eruptional uplift and subsidence cycles at the Svartsengi geothermal field, 8 km west of the eruption site. We find the observed deformation is best explained by cyclic intrusions into a permeable aquifer by a fluid injected at 4 km depth below the geothermal field, with a total volume of 0.11 ± 0.05 km3 and a density of 850 ± 350 kg m–3. We therefore suggest that ingression of magmatic CO2 can explain the geodetic, gravity and seismic data, although some contribution of magma cannot be excluded.