【TMGM Financial Recap】Israel Votes Today: Can Netanyahu Navigate a Major Political Test With Oil Prices Also at Stake?

Uncertainty over Israel’s political direction frames today’s vote for the 26th Knesset. The national election is the first since the latest round of the Israeli-Palestinian conflict broke out in October 2023, and the first since 1988 to take place on schedule. Seeking reelection at 77, incumbent Prime Minister Netanyahu first took office in 1996 and has held the premiership for nearly two decades in total. For Israeli military personnel, voting opened more than a week ago. Around 850 polling stations serve operational positions in Gaza, Lebanon, and Syria; roughly a quarter are mobile. Armed officers escort ballot boxes, which remain locked in transit. Under Israeli law, no new polls may be published between last Friday and the close of voting. Polling stations shut at 22:00 tonight, immediately followed by the release of exit polls. 

Pre-Election Polls Show 52 Seats Versus 50: Can Either Bloc Reach 61? 

A narrow opposition lead, but no majority for either camp, emerges from the final legally permitted pre-election polls, the latest available benchmark. On October 22, KAN and Channel 12 each projected 52 seats for the opposition bloc against 50 for Netanyahu’s bloc. Channel 13 put the split at 54 versus 50, and a separate Channel 12 poll at 56 versus 50. Although the opposition’s advantage ranges from two to six seats depending on the pollster, the broad assessment remains the same: it is marginally ahead, without enough seats to govern. 

Among individual parties, projections place Eisenkot’s Yashar first on 22 seats, ahead of Netanyahu’s Likud on 20 and former Prime Minister Bennett’s “Unity” party on 14. Around eight seats apiece are forecast for Ben-Gvir’s Jewish Power, Lieberman’s Yisrael Beiteinu, and Golan’s Democrats. 

A majority in the 120-seat Knesset requires 61 seats to form a government, leaving both the projected 52 and 50 below the mark. Several routes to a coalition have already been rejected by Eisenkot. Ruling out any government with Netanyahu, he has said explicitly that “a rotation arrangement is also completely out of the question”; he also opposes including Arab parties or ultra-Orthodox parties in the cabinet. Yet it is largely these groups that hold the extra seats required to bridge the gap from 52 to 61. 

For Netanyahu, the difficulty is meeting the conditions set by his allies. The far-right Ben-Gvir is gaining support, and his party is forecast to secure at least eight seats. Meanwhile, the ultra-Orthodox parties Shas and United Torah Judaism say they will enter a government only if military service exemptions are written into law. 

Much therefore rests on the Arab parties. With Arabs making up roughly one-fifth of Israel’s population, two Arab parties are forecast to secure 14 to 16 seats between them. Some members of the opposition bloc would nevertheless choose a fresh election over cooperation with those parties. Seat distribution also hinges on several smaller parties polling close to the 3.25% electoral threshold: whether they qualify for parliament will alter the allocation. 

The law specifies the next steps in forming a government. Once the official results are published, the president has seven days to decide who receives the first mandate. That candidate has 28 days for negotiations, potentially extended by 14 days; an unsuccessful attempt moves the country towards another election. A further perspective came from Britain’s The Guardian, which highlighted Netanyahu’s ability to exploit political divisions and his considerable coalition-building experience. Negotiations could still deliver him another term even if the results give him no clear advantage. 

Has Support for Netanyahu Replaced Left Versus Right as the Electoral Divide? 

Political integrity and government accountability underpin Eisenkot’s campaign slogan, “a country without lies,” along with his proposal for limits on prime ministerial terms. Rather than the traditional left-right contest, Israeli politics is now divided between blocs supporting and opposing Netanyahu. That does not make the opposition unified: on security policy, former Prime Minister Bennett and former Defence Minister Lieberman hold markedly different positions from the centre-left. 

Two concerns dominate voters’ priorities. Responsibility for the security and intelligence failures of October 7, 2023 is one, following three years of debate within Israeli society. Military service exemptions for the ultra-Orthodox are the other, having rapidly gained prominence in the months leading up to the vote. Their origins lie in a 1948 agreement between Ben-Gurion and the ultra-Orthodox community that exempted religious school students from military service. Continuing Israeli operations in Gaza and southern Lebanon, alongside pressure on reservist manpower, have brought that arrangement to the centre of the political agenda. Although the Supreme Court found in 2024 that the exemptions lacked a legal basis, the government has kept them in place. Compulsory military service features in opposition parties’ election platforms, while Yashar advocates criminal prosecution of draft evaders. 

Economic performance, by contrast, has not emerged as an election issue. For 2026, the International Monetary Fund projects Israeli growth at 4.5%, the strongest among advanced economies. Yet 58% of survey respondents view the security situation as poor. Following three years of warfare, the vote is a choice over the country’s direction. 

A former chief of staff of the Israel Defense Forces, Eisenkot is 66 and comes from a Moroccan Jewish immigrant family. He lost his son and two nephews in Gaza. Election to the premiership would make him Israel’s first prime minister of Mizrahi background. 

What Happens If No Government Is Formed and Netanyahu Stays as Caretaker? 

Failure to form a government would leave Netanyahu serving as caretaker prime minister until the next election. The incumbent administration retains its powers during that period, including the authority to make military decisions. 

Tonight’s exit polls begin a timetable that could stretch over two or three months before a new government takes office. Official results are expected by November 4, after which the president has seven days to name a candidate, followed by 28 days of negotiations. The United States holds its midterm elections on November 3, meaning the government-formation process will overlap the U.S. midterms throughout. 

Washington’s stance is already public. After describing Netanyahu as a “great wartime prime minister” on October 18, Trump posted an explicit call on October 25 for Israeli voters to back Likud. Vice President Vance, however, said he would not become involved. 

The timing of military action against Iran also falls after these political milestones. Defence Minister Katz rejected claims of plans for a pre-election strike, while reports in Israeli media said military assessments envisaged operations resuming after both elections. 

The oil market had already reacted yesterday. On the same day, senior officials from Saudi Arabia, Pakistan, and Türkiye reached Tehran for the first such contact since the war started in February. Their discussions covered shipping arrangements through the Strait of Hormuz, among other topics, as international oil prices declined around 1.5% that day. Once tonight’s exit polls are available, the key initial measure will be each bloc’s distance from 61 seats. A greater shortfall means a longer tenure for the caretaker government and a slower unwinding of the conflict premium in oil prices.