In a saucepan, add oil, shallots, garlic, basil, and dry oregano. Mix well. Cook until fragrant, about 1 to 2 minutes.
Add diced tomatoes, sugar, red chili, black pepper, and salt and it let it cook for 5 to 7 minutes.
Mash the tomatoes with a potato masher until tomatoes are broken down or leave some chunky bits according to your preference. If you like a smoother sauce, use an immersion blender and puree until the sauce is free of chunks. Take care that the sauce does not splatter and burn you.
Enjoy the sauce on pizza or pasta with veggies of your choice.