JOHANNESBURG, April 13 (Reuters) - South Africa's rand fell on Monday after peace talks between the U.S. and Iran over the weekend broke down nL1N40U07M, lifting oil prices back above $100 a barrel and denting global risk appetite.
o At 1228 GMT the rand traded at 16.58 against the dollar, about 0.9% weaker than its previous close.
o The United States announced over the weekend that it would enforce a naval blockade on all shipping entering or leaving Iranian ports and coastal waters in the Arabian Gulf and Gulf of Oman from Monday, following the collapse of direct talks in Islamabad.
o Global oil prices surged back above $100 a barrel, hurting emerging market currencies, especially those of net oil importers like South Africa and India.
o ETM Analytics said that, for South Africa, already grappling with high fuel costs and energy security concerns, the crisis threatens to raise import costs, disrupt tanker routes previously protected by its friendly status, and intensify domestic inflationary pressures.
o "The (rand) will come under pressure, and South Africa's alignment with Iran appears increasingly unhelpful. One could extend this argument to the broader BRICS+ bloc, which has offered limited support to Iran and is unlikely to provide meaningful backing to South Africa," ETM Analytics said in a research note.
o On the Johannesburg Stock Exchange, the Top-40 index was down 1%.
o South Africa's benchmark 2035 government bond weakened, as the yield rose 17.5 basis points to 8.575%.
(Reporting by Anathi Madubela and Nilutpal Timsina; Editing by Kirsten Donovan and Hugh Lawson)
