As a nuclear fuel cladding material, zirconium alloys act as a barrier between the fuel and pressurised steam or lithiated water environment. Controlling degradation mechanisms such as oxidation is essential to extending the in-service lifetime of the fuel. At temperatures of ∼360 °C zirconium alloys are known to exhibit cyclical, approximately cubic corrosion kinetics. With acceleration in the oxidation kinetics occurring every ∼2 μm of oxide growth, and being associated with the formation of a network of lateral cracks. Finite element analysis has been used previously to explain the lateral crack formation by the development of localised out-of-plane tensile stresses at the metal–oxide interface. This work uses the Abaqus finite element code to assess critically current approaches to representing the oxidation of zirconium alloys, with relation to undulations at the metal–oxide interface and localised stress generation. This includes comparison of axisymmetric and 3D quartered modelling approaches, and investigates the effect of interface geometry and plasticity in the metal substrate. Particular focus is placed on the application of the anisotropic strain tensor used to represent the oxidation mechanism, which is typically applied with a fixed coordinate system. Assessment of the impact of the tensor showed that 99% of the localised tensile stresses originated from the out-of-plane component of the strain tensor, rather than the in-plane expansion as was previously thought. Discussion is given to the difficulties associated with this modelling approach and the requirements for future simulations of the oxidation of zirconium alloys.