The global shortage of hydrocarbon-based fuel supply is not expected to derail international efforts to mitigate climate change and reach net zero carbon emissions by the middle of the century, according to the Bank of Singapore.
Parts of Europe and Asia have faced natural gas and coal shortages, prompted energy prices to surge to multi-year highs.
Concerns are rife that higher prices could spur more investment in hydrocarbons, which could derail efforts taken to wean the global economy off fossil fuels.
However, efforts to switch to clean energy will gain more pace after recent shortages, the lender said.
"Our view is that the disruptions will not derail the energy transition. The pain inflicted by the current energy crisis may spur policy changes that encourage an even more rapid transition to clean energy over the next decade," the Bank of Singapore said in a report on Tuesday.
Oil prices are at three and seven-year highs as a result of the shortages.
Brent, the international benchmark for crude, was down 0.42 per cent to trade at $85.63 a barrel at 2.08pm UAE time. West Texas Intermediate, which tracks US crude grades, was down 0.54 per cent at $83.31 a barrel.
Natural gas prices have also doubled so far this year, with Henry Hub prices climbing 0.64 per cent to $5.936 per million British thermal units at 2.10pm UAE time.
Despite indications of additional oil supply hitting the markets, the momentum towards clean energy, backed by global policy initiatives such as Cop26, is expected to remain uninterrupted.
"Notwithstanding emergency measures taken to ease energy shortages in China and Europe, we expect to see a progressive shift away from new investment in fossil fuels and a significant increase in investment in renewable energy sources," the Bank of Singapore said.
The falling prices of wind and solar energy could further encourage more investment in renewables, the report said.
Wind and solar are already some of the cheapest sources of power and will account for the bulk of electricity generation in countries representing two thirds of the world's population and three-quarters of global gross domestic product, according to BloombergNEF.
Clean energy will also account for 70 per cent of the $530bn spent on all increasing generating capacity, according to the International Energy Agency.
"The energy transition over the coming decade is likely to be highly non-linear," the bank said.
"Increasingly robust climate policies intersect with technological advancements and falling costs to propel low-carbon alternatives to the forefront across a wide range of economic activity," the report said.
The falling costs will prompt a "tipping point" in industry and will lead to rapid shifts in consumer behaviour.
