Exit polls in Israel showed neither political bloc securing the parliamentary majority needed to form a government, raising the prospect of prolonged coalition talks or another election. The uncertainty has put the next government’s approach to Iran under scrutiny, as traders weigh potential effects on crude supply expectations, inflation and global markets. Brent crude settled at $113.88 a barrel on Tuesday, with a substantial geopolitical risk premium already reflected in prices.
Exit polls point to a hung parliament
Exit polls released Tuesday put the governing bloc led by Prime Minister Benjamin Netanyahu behind the opposition camp headed by former military chief Gadi Eisenkot. Neither side appeared to reach the 61-seat threshold required to form a government, leaving the final parliamentary balance and coalition options unresolved.
Netanyahu’s Likud party was still projected to be the largest single party, with 24 seats. Eisenkot’s Yashar was projected to win 22. Turnout nationwide was 77.7%. The figures are preliminary, and the final seat distribution and government arrangements remain to be confirmed.
Arab parties could shape coalition talks
Higher participation among Israel’s Arab community was a notable feature of the election. The Joint List and Ra’am were projected to win a combined 18 seats, up from 10 in the previous parliament, potentially giving them influence in coalition negotiations.
Eisenkot has ruled out formally joining a coalition government with those parties. If neither camp can secure sufficient support, negotiations could drag on or lead to another election. The current parliamentary picture offers no clear timetable for forming a new government or indication of its policy direction.
Iran uncertainty keeps oil risks in focus
Both Netanyahu and Eisenkot support using military action to prevent Iran from obtaining nuclear weapons. The uncertainty created by the election deadlock centers on the timing and direction of decisions by a new government, as markets assess whether the United States and Israel could resume strikes against Iran.
Crude traders are weighing the possibility of an escalation in regional conflict against its potential impact on supply expectations. Brent settled at $113.88 a barrel on Tuesday, reflecting a significant geopolitical risk premium. If oil prices remain elevated, energy costs could continue to affect inflation and financial-market pricing. The election result alone, however, does not determine whether military action will follow or where oil prices will go.
Equities and crypto assets could also be affected by shifts in broader risk sentiment, though no specific price reaction in those markets was provided.