While they won a general poll in April and gained lawmakers compared to the previous term, Sanchez's socialists failed to secure a majority in parliament and will need the support of other groupings.
But despite the obvious horse-trading that entails, Sanchez is widely expected to get the backing he needs to start his second term as prime minister.
Without the necessary seats in parliament to form a majority, the conservative Popular Party, centre-right Ciudadanos and far-right Vox have already resigned themselves to being in the opposition.
Spain's monarch, who has since Wednesday been meeting party representatives at the royal palace, as is the norm after elections, ends his consultations around 6:00 pm (1600 GMT) with talks with Sanchez.
Spanish far-right VOX party leader Santiago Abascal (L) meets Spain's King Felipe VI (R) at the Zarzuela Palace. Photo: AFP
The 47-year-old's socialists won 123 seats out of 350 in the general election on April 28th
“He is profiting from the fact that the opposition is very fragmented, and can't organise any alternative majority,” says Pablo Simon, a politics expert at Madrid's Carlos III University.
Still, negotiations with other parties will not be easy — in all, 17 political groupings are represented in Spain's fragmented national parliament.
Far-left coalition Unidas Podemos, with its 42 seats, has already shown its willingness to back Sanchez back in the traditional parliamentary confidence vote that follows any general election.
But in exchange, it wants to enter a coalition government.
The socialists are not keen, preferring to rule alone in a minority government which would seek the support of other parties on a case-by-case basis when passing laws or reforms.
Even with the suport of Unidas Podemos, Sanchez will still need other regional parties to get the majority he needs.
Leader of the far-left party Podemos party Pablo Iglesias (L P takes his turn meeting King Felipe VI. Photo: AFP
He will however try and avoid courting Catalan and Basque separatist lawmakers, which would likely lead to accusations he is putting in peril the unity of Spain.
Two weeks after municipal and regional elections, negotiations have already started at a local level and could also influence which parties decide to give their support or not.
— Casa de S.M. el Rey (@CasaReal) June 6, 2019
Tough times ahead
Once voted back into power for a four-year term, Sanchez will not be out of the woods.
Right-wing parties have promised intense opposition and he still has the thorny issue of Catalonia's independence movement to contend with.
The high-profile trial of 12 separatist leaders, which is expected to end on June 12th and reach a sentence later in the year, promises to be particularly difficult to manage.
Tried for their role in a failed attempt to prise Catalonia from Spain in October 2017, the defendants face heavy sentences which would further harden the position of Catalan separatist lawmakers in the national parliament.
“It's a difficult climate, because the trial distorts everything,” says Simon.
Since the start of the sensitive trial in February, separatists have multiplied gestures of defiance towards the socialists.
First they forced Sanchez to call early elections by refusing to vote for his 2019 budget in the previous term.
Then after the polls, they stopped a politician close to Sanchez from being named president of the Senate.
Four of the defendants in the trial who are currently in detention won seats in the general election and then subsequently suspended as MPs.
If they are replaced, that will be four more votes against Sanchez when he is in power.
By AFP's Adrien Vicente