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Heat oil in a large saucepan over medium-high heat.
Add onion and ½ teaspoon salt and cook until very soft and translucent, about 5 minutes.
Add garlic and crushed red pepper and cook one minute longer.
Add tomatoes, water, remaining salt and pepper and stir to combine.
Bring mixture to a simmer and cook 10-15 minutes.
Use a wooden spoon or potato masher to break up the tomatoes to very small pieces.
Stir in tomato paste and fresh basil and cook 5 minutes longer.