The evaluation of the damage ratio of spent nuclear fuel is a very important intermediate variable for dry storage risk assessment, which requires an interdisciplinary and comprehensive investigation. It is known that the pinch load applied to the cladding can leaded to Mode-3 failure and the cladding becomes more vulnerable to this failure mode with the existence of radial hydrides and other forms of mechanical defects. In this study, the failure resistance of Zircaloy-4 cladding against the pinch load is investigated using numerical simulations assuming the existence of radial hydrides. The simulation model is based on the microscopic images of cladding. A pixel-based finite element model was created by separating the Zircaloy-4 and hydride using the image segmentation method. The image segmentation method uses a morphology operation basis, which is a preprocessing method through erosion operation after image expansion to enable normal segmentation by emphasizing pixels corresponding to hydrides. The segmented images are converted into a finite element model by assigning node and element numbers together with corresponding material properties. Using the generated hydride cladding finite element model, several numerical methods are investigated to simulate crack propagation and cladding failure under pinch load. Using extended finite element (XFEM) models the initiation and propagation of a discrete crack along an arbitrary, solution-dependent path can be simulated without the requirement of remeshing. The applicability of fracture mechanical parameters such as stress intensity, J-integral was also investigated.