Place the tomatoes with their juices in a medium bowl and, using your hands, break into rough 1-inch pieces and set aside.

Place a large skillet over medium heat and add in the oil. Once oil heats, add in the onion and cook until softened, about 5 minutes. Add the garlic, paprika, and red pepper flakes, stir to combine, and cook until fragrant, about 1 minute. Place a large skillet over medium heat and add in the oil. Once oil heats, add in the onion and cook until softened, about 5 minutes. Add the garlic, paprika, and red pepper flakes, stir to combine, and cook until fragrant, about 1 minute.

Add in the tomatoes and their liquid along with the water, salt, bay leaf, and bring to a simmer. Cook until the sauce has thickened and has reduced by about half, about 15 minutes.

Once sauce is done cooking, remove the bay leaf and transfer the mixture to a blender. Purée the sauce until smooth and then add in the vinegar and hot sauce and pulse again to combine. Taste and add more hot sauce, if needed.