Heat a large saucepot over medium-high heat. Add enough oil to cover the bottom of the pot. Sauté the onions in the oil until they look golden around the edges, about 4 minutes. Add the garlic, bell pepper, and oregano. Sprinkle with a little salt and pepper, then sauté until the peppers are soft, about 5 minutes.
Use your hands to pinch and pull out the canned tomatoes’ cores, then crush the tomatoes right into the pot. Add the tomato paste and sugar. Fill the tomato paste can 4 times with water, adding the water to the pan, and stir until incorporated. Simmer the sauce uncovered over low heat for 1 to 1½ hours, stirring now and then to prevent burning. Use an immersion blender in the pot, or an upright blender, to puree the sauce—or, for the perfect rustic texture, use a food mill.
Return the sauce to low heat and simmer until the flavors blend, an additional 1 to 1½ hours. Taste the sauce, and add salt, pepper, and sugar until it tastes good to you. Remove from the heat and stir in the basil.