Melt butter in medium saucepan over medium heat. Add onion, oregano, and 1/2 teaspoon salt and cook, stirring occasionally, until onion is softened and lightly browned, 5 to 7 minutes. Stir in garlic and cook until fragrant, about 30 seconds. Stir in tomatoes and sugar, bring to simmer, and cook until slightly thickened, about 10 minutes. Off heat, stir in basil and oil and season with salt and pepper to taste.