* Oil prices jump as Middle East tensions flare up

* Peru's defense minister resigns amid postponement of

F-16 aircraft purchase

* Argentina's Milei to send electoral reform to lawmakers

* Venezuela creditors met with Trump officials, report

says

(Updates with afternoon trading)

By Johann M Cherian and Twesha Dikshit

April 22 (Reuters) - Most major Latin American stocks

dropped on Wednesday as geopolitical tensions flared up in the

Middle East, clouding the outlook for a lasting peace in the

region, while electoral uncertainties prevailed in Peru.

MSCI's index tracking Latin American stocks

fell 1.1%, with Brazil's equities benchmarks down 1.7%

and Chile's IPSA shedding 1.1%.

An index tracking regional currencies was

marginally lower as investors flocked to the safe-haven dollar,

which hovered near a one-week high. Brazil's real slipped

0.4%, while Mexico's peso was largely unchanged.

Crude prices shot up 3% to more than $100 a barrel after

Iran seized two ships in the Strait of Hormuz, tightening its

grip on the strategic waterway. U.S. President Donald Trump

called off attacks indefinitely, with no sign of peace talks

restarting.

Higher crude prices lifted the shares of local energy

companies, such as Brazil's Petrobras, Colombia's

Ecopetrol and Argentina's YPF, while shares

of Chile's Latam Airlines and Brazilian plane maker

Embraer ( EMBJ ) fell 3% and 6%, respectively.

Commodity-heavy Latin American countries have benefited from

a weaker dollar, outperforming other emerging markets. However,

a prolonged conflict in the Middle East or stronger dollar could

quickly alter the story.

"That's certainly a headwind for Latin American markets, as

many (of them) have debt in U.S. dollars so as the dollar

strengthens, that could expand the balance sheet and increase

net interest expenses," said Malcolm Dorson, head of EM Strategy

at Global X.

"Many of these countries produce commodities that are

priced in dollars so if the dollar strengthens, then demand for

those commodities decline and you ultimately end up seeing lower

commodity prices."

PROBLEMS PERSIST IN PERU

Investors were focused on Peru after the head of the

country's electoral authority, Piero Corvetto, resigned on

Tuesday as pressure grows over the long-delayed results from the

country's April 12 general election.

The latest vote count shows conservative candidate Keiko

Fujimori is in the lead, followed by left-wing congressman

Roberto Sanchez. The final vote count is expected to be

announced no later than May 15 and a runoff is expected in June.

MSCI's benchmark for Peruvian stocks rose

1.1%, recouping some of its 3% fall on Tuesday, while local

hard-currency bonds were marginally higher and the sol

was 0.4% weaker.

"The key focal point will be macro policy continuity,

particularly leadership at the central bank and (central bank

President Julio Velarde Flores') succession, which coincides

with the new presidential inauguration in July," said Kathryn

Exum, co-head of sovereign research at Gramercy.

Further fueling uncertainty in the country, Defense Minister

Carlos Diaz resigned from his post on Wednesday, shortly after

interim President Jose Balcazar decided to postpone a purchase

of F-16 aircraft from the U.S.

Peru is a top copper exporter and investors are keen to know

how the electoral outcome will change policy.

Exum said uncertainty for Peru's key mining sector would be

a bit more elevated if Sanchez won, while a Fujimori victory

would be more constructive.

Argentina's economic activity dipped 2.1% compared to the

same month last year, according to official data, coming in

below analyst estimates. Local stocks lost 1.4%.

President Javier Milei said he will send an electoral reform

bill to Congress to eliminate mandatory primary elections. The

peso dipped 0.2%.

Key Latin American stock indexes and currencies at 20:09

Stock indexes

Latest

Daily %

change

MSCI Emerging Markets 1606.17 -0.58

MSCI LatAm 3277.83 -1.06

Brazil Bovespa 192894.71 -1.65

Mexico IPC 68802.79 -0.01

Chile IPSA 11001.88 -1.14

Argentina MerVal 2900024.46 -1.36

Colombia COLCAP 2283.49 0.06

Currencies Latest Daily %

change

Brazil real 4.9746 -0.43

Mexico peso 17.3473 -0.15

Chile peso 888.25 0.2

Colombia peso 3555.5 0.56

Peru sol 3.4446 -0.38

Argentina peso 1,378.0 -0.18

(interbank)

Argentina peso 1,395.0 1.06

(parallel)