【TMGM Financial Recap】Today’s Vote in Israel Puts Netanyahu to a Major Political Test, With Oil Prices in the Balance

For the first time since 1988, Israel is holding a national election on schedule, voting today for the 26th Knesset. It is also the first national vote since the latest round of the Israeli-Palestinian conflict began in October 2023. At 77, incumbent Prime Minister Netanyahu is standing for reelection, having first assumed the premiership in 1996 and spent nearly two decades in office in total. Military voting got under way more than a week ago, with around 850 polling stations serving operational positions across Gaza, Lebanon, and Syria. Roughly a quarter are mobile stations. Armed officers accompany ballot boxes during transport, when the boxes are kept locked. A legal ban on publishing new polls has been in force since last Friday and remains in place until voting ends. The polls close tonight at 22:00, when exit polls will be published immediately. 

Pre-Election Polls Leave Both Blocs Short of 61 Seats at 52 Versus 50 

With no newer polls legally available, the final pre-election surveys remain the latest guide. Results published on 22 October by KAN and Channel 12 gave the opposition bloc 52 seats and Netanyahu’s bloc 50. Channel 13 recorded 54 versus 50, while a further Channel 12 survey put the figures at 56 versus 50. Despite differences between pollsters, which give the opposition an advantage of two to six seats, the message is broadly unchanged: a modest opposition lead leaves both blocs without a majority. 

A projected 22 seats would put Eisenkot’s Yashar party in first place, with 20 for Netanyahu’s Likud and 14 for the “Unity” party of former Prime Minister Bennett. The forecasts also give Ben-Gvir’s Jewish Power, Lieberman’s Yisrael Beiteinu, and Golan’s Democrats around eight seats each. 

In a Knesset of 120 seats, a government needs a majority of 61, beyond either the 52 or 50 indicated by the polls. Eisenkot’s stated positions leave several potential coalition arrangements off the table. He has made clear that he will never serve in a government alongside Netanyahu, adding that “a rotation arrangement is also completely out of the question”; Arab parties and ultra-Orthodox parties are also excluded from his proposed cabinet. Those groups, however, account for most of the seats needed to take a bloc from 52 to 61. 

For Netanyahu, securing his allies’ support means confronting their conditions. The far-right Ben-Gvir has attracted growing backing, putting his party on course for at least eight seats. Shas and United Torah Judaism, the ultra-Orthodox parties, have meanwhile made legal protection for military service exemptions a prerequisite for joining any government. 

With two Arab parties forecast to take 14 to 16 seats in total, their role could be decisive. Arabs represent roughly one-fifth of the Israeli population, yet cooperation with their parties remains less acceptable to some opposition figures than a further election. The eventual seat distribution will also depend on whether several smaller parties, currently near the 3.25% electoral threshold, gain parliamentary representation. 

Legal deadlines govern the coalition talks. The president must award the first mandate to form a government within seven days of the official results being published. The candidate then has 28 days to negotiate, with an extension of 14 days possible; a failed attempt takes Israel closer to a further election. Britain’s The Guardian presented a different consideration, pointing to Netanyahu’s experience in assembling coalitions and his skill in using political divisions to his advantage. Even a result offering no clear lead may therefore allow him to negotiate another term. 

Netanyahu Replaces Left and Right as the Focus of Israel’s Political Divide 

With the slogan “a country without lies,” Eisenkot is campaigning on integrity in politics and accountability in government, while proposing limits on prime ministerial terms. Support for or opposition to Netanyahu now defines Israel’s political divide, displacing the traditional left-right competition. Nor does opposition to him imply agreement on policy: former Prime Minister Bennett and former Defence Minister Lieberman take security positions substantially different from those of the centre-left. 

Two questions stand out among voters’ concerns. Accountability for the security and intelligence failures on 7 October 2023 has occupied Israeli society for three years. Exemptions from military service for the ultra-Orthodox have become the other leading concern, rising sharply up the agenda in the months ahead of the vote. The arrangement originated in 1948, under an agreement between Ben-Gurion and the ultra-Orthodox community allowing religious school students to avoid military service. Continued Israeli operations in Gaza and southern Lebanon, together with strains on reservist manpower, have made that agreement a central political issue. A 2024 Supreme Court ruling found no legal basis for the exemptions, although the government has maintained them. Compulsory military service now appears in opposition election platforms; Yashar’s proposals also include criminal proceedings against draft evaders. 

Growth of 4.5% in 2026 is the International Monetary Fund’s forecast for Israel, the highest rate among advanced economies, but the economy has not featured as an election issue. By contrast, 58% of those surveyed regard the security situation as poor. Three years of warfare have left voters facing a decision about the country’s future direction. 

Aged 66, Eisenkot previously served as chief of staff of the Israel Defense Forces. His family were Moroccan Jewish immigrants, and his son and two nephews were killed in Gaza. Were he to win the premiership, Israel would have its first prime minister of Mizrahi background. 

Failed Coalition Talks Would Keep Netanyahu in Office as Caretaker 

Until a further election, Netanyahu would continue as caretaker prime minister if no government could be assembled. Caretaker status does not remove the incumbent government’s powers, which extend to military decision-making. 

The timetable starts with tonight’s exit polls and official results due by 4 November. After that, the president has seven days to select a candidate, who then enters 28 days of negotiations. With the United States holding midterm elections on 3 November, the entire process overlaps the U.S. midterms. A new government may not be formed for two or three months from today. 

An endorsement has already come from Washington. Having described Netanyahu on 18 October as a “great wartime prime minister”, Trump followed on 25 October with a post explicitly urging Israelis to vote for Likud. Vice President Vance, by contrast, said he would stay out of the matter. 

These electoral milestones also precede the scheduled military action against Iran. Defence Minister Katz dismissed suggestions that a strike was planned before the election. Reports from Israeli media, meanwhile, said military assessments put renewed operations after both elections. 

A fall of around 1.5% in international oil prices yesterday came ahead of the vote. That day also brought senior officials from Saudi Arabia, Pakistan, and Türkiye to Tehran, in the first contact of its kind since the war started in February. Shipping arrangements through the Strait of Hormuz were among the matters discussed. Tonight’s exit polls will provide the first indication of how far each bloc falls below 61 seats. A wider gap would prolong the caretaker administration’s time in office and delay the easing of the conflict premium in oil prices.