Are you looking to buy low on ASX energy stocks this year? I believe two holdings have room for growth.

Aussie investors enjoyed strong returns in 2024 across many sectors, with information technology and financials leading the way. 

However, the energy sector fell significantly in 2024, as did many operators in the materials sector. This included Australia's largest mining company, BHP Group Ltd (ASX: BHP), which dropped a whopping 21.54% over the course of 2024. 

Why the fall despite an overall strong year on the ASX?

Weakening commodity prices, geopolitical tensions and shifting demand from China — Australia's largest export destination — are likely impacts. 

Is it time to buy low on energy stocks?

Although the S&P/ASX 200 Index (ASX: XJO) delivered strong returns and record highs in 2024 –alongside its US counterpart, the S&P 500 Index (SP: .INX) — it can be difficult to find value when share markets hit those heights. 

The energy sector's path to growth in 2025 is by no means smooth. Donald Trump's impending presidency in the United States has led to murmurings of trade tariffs, geopolitical tension, and a foggy outlook for punters.

Furthermore, investors holding energy stocks through 2024 (yours truly) have certainly felt the pain in the past 12 months.

But I believe these risks are already baked into the current price of two high-value energy stocks that offer upside in valuable Australian commodities.

Santos Ltd (ASX: STO)

Santos is one of Australia's largest oil and gas companies, producing crude oil and liquefied natural gas to domestic and global markets. 

The ASX energy share dropped as much as 13% in 2024 before closing out the year with a strong uptick. At the time of writing, Santos is trading at $6.86 per share, well below its 52-week high of $8.18. 

However, I believe Santos has significant potential for a rebound in 2025.

Santos has a strong Liquified Natural Gas (LNG) position, including several long-term contracts. This is vital for long-term health as countries continue to move away from coal and invest in climate-positive energy solutions. 

Secondly, global interest rate cuts are expected in 2025, which could have a favourable effect on economic growth. 

Why is this relevant for Santos? As economies grow, demand for energy (particularly natural gas and LNG) tends to increase. 

Finally, crude oil prices increased in December, giving energy stocks a boost following an extended period of low commodity prices.

Santos also offers a strong dividend yield of 6.68%.

If energy prices rebound, and demand increases, Santos could be a great value right now. 

Woodside Energy Group Ltd (ASX: WDS)

Woodside Energy Group endured an even larger fall in 2024, with its shares plunging 18.67% over the last year. 

However, I believe Woodside is also well-positioned to rebound this year.

Woodside is one of Australia's largest companies by market capitalisation and has already had a fast start in 2025, gaining 3% since the turn of the new year. 

As Woodside is one of the largest LNG producers in the world, it is well-positioned to meet the future demand for clean energy. 

Analysts are also bullish on Woodside Energy. The team at Morgans lists a $33.00 price target on its shares. This implies an upside of around 30% for investors. 

Despite a tough 2024, I think the fast start this year for both ASX energy stocks might be a sign of what's to come in 2025.