Melt butter in medium saucepan over medium heat. Add onion, oregano, and ½ tsp. Salt. Cook, stirring occasionally, until onion is softened and lightly browned, about 5 minutes. Stir in garlic and cook until fragrant, about 30 seconds. Stir in tomatoes and sugar, bring to a simmer and cook until sauce has reduced to 2 ½ cups, 25-30 minutes. Take off heat and add basil and olive oil; season with salt and pepper to taste.