In a saucepan, heat olive oil over medium heat. Add chopped onion and sauté until translucent, about 5 minutes.

Add minced garlic and cook for another minute until fragrant.

Stir in the diced tomatoes with their juices and vegetable broth. Bring to a boil.

Reduce heat and let simmer for about 20 minutes.

Add fresh basil leaves and sugar (if using). Blend the soup until smooth using an immersion blender or in batches in a regular blender.

Season with salt and black pepper to taste. Serve hot.