Lack of consideration of the geomechanical interaction between salt bodies and surrounding formations has led to documented drilling failures adjacent to salt diapirs1–3 , in some cases resulting in individual well abandonment costs of tens of millions of dollars. To address this issue, a three-dimensional non-linear finite element geomechanical simulation effort was initiated to analyze the in situ stress state existing in and adjacent to salt bodies before drilling as well as under producing conditions. This work leverages unique expertise in salt mechanics and computational geomechanical modeling. Non-linear finite element geomechanical models were developed for four idealized deepwater Gulf of Mexico geometries including a spherical salt body, a horizontal salt sheet, a columnar salt diapir, and a columnar salt diapir with an overlying tongue. The analyses reveal that at certain locations for specific geometries: shear stresses may be highly amplified; horizontal and vertical stresses may be significantly perturbed from their far-field values; principal stresses may not be vertical and horizontal (i.e., the vertical stress may not be the maximum stress); and anisotropy in the horizontal stresses may be induced. For some geometries, the vertical stress within and adjacent to the salt is not equal to the gravitational load; i.e., a stress-arching effect occurs. Analogously, the assumption that the horizontal stress within a salt body is equal to the lithostatic stress is shown to be incorrect sometimes. The modeling also suggests an alternative explanation for the so-called rubble zones thought to occur beneath and/or adjacent to salt diapirs, in that they may be an intrinsic consequence of the equilibrium stress field needed to satisfy the different stress states that exist within the salt body and in the non-salt surrounding formations. We demonstrate with an example how this work can enable more rigorous planning of well locations and trajectories by providing more accurate estimates of the vertical and horizontal stresses around and within salt bodies for wellbore stability analyses so as to avoid areas of potential geomechanical instability, and to enable accurate fracture gradient prediction while entering, drilling through, and exiting salt bodies.