Saxo stratest says 'full-blown energy crisis' is a risk after lack of progress at talks

A Pakistani Ranger walks past a billboard for the US-Iran peace talks in Islamabad on April 12, 2026. Iran and the United States failed to reach an agreement to end the war in the Middle East after marathon talks in Islamabad, Pakistan.

After marathon talks in Pakistan between the U.S. and Iran failed to reach a deal, S&P 500 futures and bitcoin were moving lower and oil higher on Sunday.

Hyperliquid, a crypto platform that is closed to U.S. investors, indicated a sharp drop for the S&P 500 SPX and a rise for oil (CL.1) (BRN00). Bitcoin, which trades around the block, dropped some 3%, falling below $72,000.

"We've had a number of substantive discussions with the Iranians. That's the good news. The bad news is that we have not reached an agreement - and I think that's bad news for Iran much more than it's bad news for the United States of America," Vice President JD Vance said at a press conference early Sunday in Islamabad, Pakistan, following 21 hours of talks.

Vance blamed the breakdown on Iran's lack of commitment over seeking a nuclear weapon or the tools to allow it to build one quickly. "The simple question is do we see a fundamental will for the Iranians not to develop a nuclear weapon not just now, not just two years from now, but for the long term. We haven't seen that yet, but we hope that we will," he said.

A foreign ministry spokesman from Iran responded that no further talks were planned, but diplomatic efforts would continue, according to reports. The two countries agreed Tuesday to a two-week cease-fire deal, seen as shaky due to disagreement over whether Israel's attacks on Iran's allies in Lebanon represent a violation of that.

The New York Times reported gaps between the two sides that include Iran's refusal to reopen the Strait of Hormuz before a deal is finalized and the fate of its enriched uranium.

President Trump did not directly comment on the talks on his Truth Social account, but shared a news article about how the U.S. could use a U.S. naval blockade to gain control of the Strait of Hormuz. He had earlier reiterated that the U.S. had totally defeated Iran's military and assured the Strait of Hormuz "would be open soon."

"We leave here with a very simple proposal: a method of understanding that is our final and best offer. We'll see if the Iranians accept it," said Vance.

Read: A short-covering rally has stocks on shaky footing. Here's what could happen next.

Ahead of the talks, U.S. and global benchmark crude contracts posted the worst weekly percentage losses in nearly six years. That's as hopes for a deal helped drive the Dow industrials DJIA, S&P 500 SPX and Nasdaq Composite COMP to their biggest weekly gains since late November.

"The meeting, as expected or feared, yielded no tangible outcome, reflecting the fact that the U.S. is not negotiating from a position of strength. The lack of progress risks pushing the global market closer to a full-blown energy crisis," Saxo Bank's head of commodity strategy Ole Hansen told MarketWatch.

"From a U.S. policy perspective, the options remain constrained: a retreat, which would carry significant political cost; renewed military action, with no clear endgame; or an extension of the ceasefire to allow further negotiations," he said.

Hansen said the latter seems the most likely outcome for the near term, with Iran in a stronger position and Washington having to adjust to that. "Control over the Strait of Hormuz continues to provide Tehran with significant leverage, and there is little indication it will accept terms that weaken its strategic standing."

Read: What's at stake for markets as the U.S. and Iran talk this weekend

Also: Here's a look at the known damage to Gulf energy facilities as the U.S. and Iran meet for talks

-Barbara Kollmeyer

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