NEW YORK, April 13 (Reuters) - The dollar climbed on Monday after peace talks between the U.S. and Iran broke down nL1N40U07M and as the U.S. Navy prepared to blockade Iranian ports, while the Hungarian forint rallied after the center-right Tisza party defeated Viktor Orban in a landslide election victory.

U.S. crude rose 6.94% to $103.27 a barrel and Brent rose to $101.73 per barrel, up 6.86% on the day nL1N40V07F as the U.S. military's regional Central Command said the blockade would start nL6N40V09S at 10 a.m. ET (1400 GMT) on Monday, to be "enforced impartially against vessels of all nations" entering or leaving Iranian ports in the Gulf and the Gulf of Oman, putting a recent ceasefire in jeopardy.

The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.16% to 98.88, with the euro down 0.18% at $1.1698. The greenback is coming off its biggest weekly percentage drop since mid-January.

"The market went into the weekend optimistic, the dollar finished near its lows, so the short-term market was leaning the wrong way," said Marc Chandler, chief market strategist at Bannockburn Capital Markets in New York.

"Given that we could be on the verge of a major escalation, I'd say the market is showing a lot of restraint."

The risk-sensitive Australian dollar weakened 0.21% versus the dollar to $0.7045 and the New Zealand dollar edged down 0.09% versus the greenback to $0.5827.

The war in the Middle East https://www.reuters.com/world/iran/ has pushed crude prices up about 40% since the end of February, when the war began, heightening concerns about higher inflation and lower global growth, also known as stagflation.

The dollar has tended to gain when tensions between Iran and the U.S. have risen, given its status as a safe haven and the relative insulation of the U.S. to imported energy-price inflation.

Against the Norwegian krone,, the dollar weakened 0.47% to 9.488 and the Canadian dollar strengthened 0.01% versus the greenback to C$1.383 per dollar, with both currencies sensitive to movements in crude prices.

"Beneath the surface, today's price action looks less risk-led and more driven by relative terms of trade shifts," said Goldman Sachs analyst Teresa Alves in a note.

HUNGARIAN FORINT RISES

The Hungarian forint surged after nL1N40W0F7 veteran nationalist leader Viktor Orban lost power nL1N40V01B to Peter Magyar's Tisza party in Sunday's national election after 16 years in office.

The currency jumped 2.85% versus the dollar at 311.51 after touching 309.34, its strongest level since February 2022.

"The polls showed Orban was going to lose, that he actually did lose and conceded is a good sign, but this is not like a shift to some kind of left position," said Chandler.

YEN WEAKENS

Against the yen, the U.S. dollar was up 0.28% to 159.74 as yields nL4N40V03Y on Japan's benchmark 10-year government bonds advanced 3.2 basis points to 2.496%, the highest in nearly three decades.

Bank of Japan nL1N40W05N Governor Kazuo Ueda said on Monday that economic and price developments were moving roughly in line with the bank's forecasts, but called for vigilance over the impact of the conflict in the Middle East.

(Reporting by Chuck Mikolajczak; additional reporting by Gregor Stuart Hunter in Singapore and Samuel Indyk in London; Editing by Kirsten Donovan, Hugh Lawson and Ros Russell)

By Chuck Mikolajczak