Israel's parliamentary elections ended without a clear winner, and the future of the military conflict with Iran remains uncertain. The political deadlock could negatively affect global oil prices, inflation levels, and financial market behavior.
Exit polls showed that Prime Minister Benjamin Netanyahu's coalition is trailing the opposition led by former army chief Gadi Eisenkot. Neither side secured the 61 seats in parliament needed to form a government.
This uncertainty arose amid oil traders' fears of a possible resumption of US and Israeli strikes on Iran. The Brent price has settled at $113.88 — the market is already pricing in high geopolitical risk.
An unexpected result and record turnout
According to projections, Netanyahu's Likud party remains the largest with 24 seats, while Eisenkot's Yashar party has 22 seats. The biggest surprise came from the results among Israel's Palestinian citizens: record turnout in Arab communities is projected to give the Joint List and the Ra'am party 18 seats, up from 10 in the previous parliament. Overall turnout was 77.7%.
Thus, Arab parties could gain decisive influence. However, Eisenkot has ruled out formal cooperation with them, which leaves room for protracted negotiations or new elections.
Different approaches to Iran
Both leaders advocate a tough stance against Tehran's nuclear ambitions. The main differences lie in the scale of force used and readiness to negotiate. Netanyahu supports publicly backing US President Donald Trump, while the specific parameters of new American military aid have not yet been agreed.
Why Wall Street is watching the elections
The main danger remains the Strait of Hormuz — in 2025 it accounted for roughly 25% of global seaborne oil trade. Any serious disruption there could drive up global energy prices, complicate rate cuts, and create additional pressure on risk assets — stocks and cryptocurrencies. Five major international banks have already assessed these risks: Commerzbank, Goldman Sachs (about $27 of the Brent price per barrel is tied specifically to geopolitical risks), UBS (Brent closer to $110 by year-end versus an earlier forecast of $100), SEB, and MUFG.
If the parties achieve a significant diplomatic breakthrough, oil will become cheaper and inflation risks will decrease — this would support both stocks and bitcoin. New attacks on energy infrastructure in the Persian Gulf would have the opposite effect: inflation expectations would intensify and borrowing costs would rise.
Cryptalist analysis: The market is currently pricing a geopolitical premium into oil rather than the fundamental balance of supply and demand, which makes crypto assets hostage to political news from Tel Aviv and Washington. A protracted Israeli deadlock combined with the US midterm elections on November 3 creates a regime of heightened volatility in which bitcoin remains correlated with risk assets. Institutional investors would be well advised to view cryptocurrencies as a high-beta instrument for geopolitical risk rather than a "digital safe haven" as long as the threat of supply disruptions through the Strait of Hormuz persists.