Europe will ban insurance for Russian oil cargoes in the biggest blow yet to Putin's war machine, reports say

According to reports, the UK and EU are planning to ban ships carrying Russian oil from getting insurance, which is a huge blow to Moscow's efforts to fund its war in Ukraine.

According to the Financial Times, ships carrying Russian oil will not be able to take out insurance at the Lloyd's of London market.

The insurance ban will be in place in six months, according to the Wall Street Journal. The UK government, European Commission and Lloyd's of London did not respond to requests for comment.

Analysts said the move could lead to a drop in the transportation and sale of Russian oil. Oil shipments have an immense value and insurance is important.

The EU banned insurance on Iranian oil as part of a round of sanctions a decade ago.

The Western ban on insuring tanker ships carrying Iranian oil was the most effective measure in taking a significant part of the Islamic Republic's oil exports off markets, according to a note Tuesday.

It comes as part of the EU's sixth round of sanctions against Russia.

The bloc agreed to a ban on imports of Russian oil by the end of 2022. The insurance ban is a stronger weapon according to an economist.

The EU oil embargo doesn't prevent Russia from shipping its oil elsewhere, so it doesn't shut down Putin's money machine.

Only sanctions on maritime insurance or an EU ban on Greek oil tanker out of Russia will do that.

The moves are likely to make the oil market more competitive and cause more economic pain for Western economies.

Since the beginning of the year, the price of crude oil has risen due to sanctions and the war in Ukraine. After the EU imposed an import ban, it hit $125 a barrel, but cooled to $117 Wednesday.

According to the IEA, Russia is the world's largest exporter of oil.

Thanks to a sharp rise in energy prices that has sent revenues from oil and gas exports soaring, Putin has been able to avoid a major economic crisis.

Demand for natural resources is only going to get stronger, and investors haven't missed the chance to use commodities as an inflation hedge.