Heat olive oil in a saucepan over medium heat.
Add chopped onion and sauté until soft, about 5 minutes.
Stir in garlic and cook for another minute until fragrant.
Pour in crushed tomatoes, diced tomatoes, and tomato paste.
Add oregano, basil, red pepper flakes, salt, black pepper, and sugar.
Bring to a simmer and let cook for 20 minutes, stirring occasionally.
Stir in fresh basil and balsamic vinegar, then remove from heat.
Let cool slightly before serving over pasta or using in other dishes.