Heat oil in a medium saucepan over medium-high heat.
Add onions, garlic and red chili (red pepper) flakes.
Saute, stirring occasionally, for about 2-3 minutes or until the onions are soft and translucent.
Add tomatoes and water. Stir to combine.
Season with salt and pepper.
Bring to a boil. Reduce heat. Simmer for about 10 minutes.
Add basil. Simmer for another 10-15 minutes.
Using an immersion blender, puree to a smooth mixture.
Store in the refrigerator for 2-3 days.