MOSCOW, June 16 (Reuters) - The Russian rouble

strengthened against the U.S. dollar on Monday, following a

surge in oil prices due to potential supply risks from the

Israel-Iran conflict.

By 1200 GMT, the rouble was up 1.3% at 78.65 per U.S.

dollar, according to LSEG data based on over-the-counter quotes.

The Russian currency is up by about 40% against the dollar since

the start of the year.

Analysts, most of whom consider the rouble overvalued, noted

that the new geopolitical risks have reduced the likelihood of

new sanctions against the Russian energy sector, which G7

leaders were scheduled to discuss at their meeting in Canada.

"The current situation may also affect the discussion of new

sanctions on Russian oil, possibly postponing the decision on

their implementation," said Sofya Donets from T-Bank.

Against the Chinese yuan, the most traded foreign currency

in Russia, the rouble weakened by 0.2% to 10.90 on the Moscow

Stock Exchange.