Submarine pipeline is a type of important infrastructure in petroleum industry, used for transporting crude oil or natural gas. Understanding of the dynamics characteristics under hydrodynamic loading is crucial for engineers when assessing the stability of offshore pipelines in their designed service period. In this study, taking the integrated numerical model FSSI-CAS 2D as the tool, the nonlinear ocean wave & current-induced dynamics of a shallowly buried submarine steel pipeline and its surrounding loosely deposited seabed soil is numerically investigated. The excellent soil model Pastor-Zienkiewicz-Mark III (PZIII) is adopted to describe the complicated mechanical behaviour of loose seabed soil under cyclic loading. Computational results indicate that the shallowly buried submarine pipeline eventually significantly float up, and extrude the seabed soil over the pipeline driven by the gradually increased buoyancy on the pipeline caused by the accumulation of pore pressure around the pipeline, making the seabed over the pipeline hunch significantly. As a result, considerable deformation occurs in the seabed soil surrounding the pipeline. Two effective stress-based criterion are proposed to judge the occurrence of soil liquefaction. Adopting the two criterion. it is found that the surrounding seabed soil around the pipeline does not become liquefied; only stiffness softening has occurred in it. However, the soil in the upper seabed with shallow depth away from the pipeline becomes liquefied with a liquefaction depth 1.2–1.5 m. Comparative analysis indicates that the pipeline transporting natural gas floats upward with a much greater displacement than that if crude oil is transported. The computational results show that the integrated mode FSSI-CAS 2D has successfully and subtly captured a series of nonlinear physical phenomena of the intensive interaction between pipeline and its surrounding seabed soil. Finally, it is indicated that the integrated model FSSI-CAS 2D has an advantage to investigate the complicated interaction between fluid-structure-seabed foundation.