Heat butter and olive oil in a large saucepan over medium-low heat and cook onion and garlic until onion is soft and translucent, about 5 minutes. Add tomatoes, water, sugar, salt, pepper, red pepper flakes, celery seed, and oregano. Bring to a boil. Reduce heat, cover, and simmer for 15 minutes.
Remove from heat and puree with an immersion blender. Reheat soup until warm and season with more salt and pepper if desired.