* Oil prices surge 5% as investors weigh potential

US-Iran peace talks

* US, Mexico to launch formal USMCA talks week of May 25,

USTR says

* Peru's election results delayed as authorities review

contested ballots, electoral chief resigns

* Romania's PM Ilie Bolojan says he will lead minority

government after coalition split

(Updates with afternoon prices)

By Johann M Cherian and Twesha Dikshit

April 21 (Reuters) - Currencies and stocks of most major

Latin American economies were mixed on Tuesday as investors

weighed the likelihood of potential U.S.-Iran talks to end the

Middle East conflict, while monitoring political developments in

Peru and Romania.

MSCI's index tracking Latin American stocks

slipped 0.4%, while a broader emerging markets equities index

recouped losses from the Middle East conflict.

A LatAm FX gauge inched up 0.3% near record

highs versus the dollar, with Brazil's real leading gains

with a 0.2% rise.

Oil prices, a key driver for emerging markets, surged 5%

near $98 a barrel as crude shipments through the strategic

Strait of Hormuz remained largely halted, while U.S. President

Donald Trump said he did not want to extend a soon-to-expire

ceasefire.

Iran said it was yet to decide whether to attend peace talks

with Washington after U.S. forces boarded a huge Iranian oil

tanker at sea.

"Both sides have made their points. However, the

contradictory statements out of Iran suggest that the new

leadership in Iran is still coalescing," said AJ Mediratta,

partner at Greylock Capital Management.

"And it's not unreasonable for the Iranians to be

untrusting given how volatile the Trump administration has been.

But Iran badly, badly needs that strait to be open."

POLITICAL JITTERS IN PERU, ROMANIA

Uncertainty prevailed over electoral results in Peru with

the head of electoral authority resigning on Tuesday as pressure

grew over the long-delayed results from the country's April 12

general election.

The country's electoral authorities have begun reviewing

thousands of contested ballots, delaying final results, as no

clear presidential rival has emerged to face conservative

frontrunner Keiko Fujimori in a June runoff.

The local stocks index fell 3.1%, while the

sol and international bonds

were broadly unchanged.

"The results have been a bit delayed for the runoff

contender... we could see some continued lag in performance up

until that becomes clear," said Kathyrn Exum, Gramercy's co-head

of sovereign research.

"Ultimately so long as policy continuity at the

macroeconomic level is sustained, some of that will be unwound

in the aftermath once we get the outcome."

Elsewhere in emerging Europe, Romanian Prime Minister Ilie

Bolojan said he will lead a minority government to ensure that

reforms needed to tap European Union funds are met, a day after

the leftist Social Democrats (PSD) - his coalition's biggest

party - withdrew their support.

The country's currency was flat at 5 per euro,

although investors were pricing in selling pressure to weigh in

the months ahead.

The local stocks index fell 1.5% to a two-week low,

while the cost of insuring against a potential sovereign default

jumped over 1.3 basis points to a two-week high of 157.

Brokerage JPMorgan downgraded the country's debt to 'market

weight' from 'equal weight' on Monday.

Meanwhile, markets were keen on the outcome of a potential

revamp to the U.S., Mexico and Canada free-trade deal, with the

first bilateral round of talks set for the week of May 25.

During his latest visit to Mexico, U.S. Trade Representative

Jamieson Greer told the country's auto and steel industries that

they should not expect the renegotiation to remove tariffs on

their sectors, according to sources.

Uncertainty about the outcome of the negotiations is likely

to hold back the local economy this year, a Reuters poll of

economists showed.

The local peso dipped 0.3% and international bonds

were marginally lower, while local stocks lost 1.7%.

Meanwhile, Venezuelan bond investors met with Trump

administration officials for the first time last week to discuss

their potential role in the nation's economic recovery,

Bloomberg News reported.

Key Latin American stock indexes and currencies at 19:38 GMT:

Stock indexes

Latest

Daily %

change

MSCI Emerging 1611.84 0.72

Markets

MSCI LatAm 3318.84 -0.44

Brazil Bovespa 196132.06 0.2

Mexico IPC 68875.02 -1.72

Chile IPSA 11210.93 -1.17

Argentina MerVal 2955591.14 0.82

Colombia COLCAP 2291.85 0.22

Currencies Latest Daily %

change

Brazil real 4.9535 0.25

Mexico peso 17.344 -0.32

Chile peso 891.18 -1.1

Colombia peso 3582.5 -0.31

Peru sol 3.4354 -0.03

Argentina peso 1,374.0 0.25

(interbank)

Argentina peso 1,390.0 1.42

(parallel)