Process tomatoes and the juice in food processor until pureed, or with hand blender. Should be smooth, set aside.
Combine butter and oil in a sauce pan over medium heat until melted. Add garlic, oregano, pepper flakes, and large pinch of salt and cook, stirring frequently, until fragrant but not browned, about 3 minutes.
Add tomatoes, basil sprigs, onion halves, and sugar. Bring to a simmer, reduce heat to lowest setting and cook, stirring occasionally, until reduced by 1/2, about an hour. Remove onion and basil, discard.
Season to taste with salt. Allow to cool and store in covered container in the refrigerator for up to 2 weeks.