Heat saucepan to medium heat and add oil and diced onions. Cook, stirring occasionally, until onions are soft. Add minced garlic and cook another minute until fragrant. Add remaining ingredients and bring to a low simmer for 10 minutes. Remove from heat and let cool.
Transfer sauce to a blender and blend until smooth.
Notes
** This enchilada sauce will last in an airtight container in the fridge for about 3-5 days and in the freezer for about a month.