Using a 5 to 6 quart stockpot, over medium-high heat, add the olive oil and butter.
Add the finely diced onion and fresh minced garlic. Cook for 5 to 7 minutes, stirring often until the onion is translucent.
Whisk in the flour and continue to cook and stir for 2 minutes.
Add the tomato puree, vegetable broth, and tomato paste. Stir to completely incorporate the tomato paste.
Add the granulated sugar, kosher salt, dried basil, cracked pepper, red pepper flakes, and whole bay leaves. Stir occasionally until the soup begins to simmer. Lower the heat to medium and continue to cook for 15 to 20 minutes, stirring occasionally.
Remove the soup from the heat. Remove the bay leaves before serving.
Garnish with fresh, thinly sliced basil.