In a heavy-bottomed pot, like a Dutch oven, heat oil over medium heat.
When oil is warm, add onion and sauté until slightly softened, about 6 minutes.
Add chopped garlic and cook an addition 1 - 2 minutes, stirring occasionally.
Add seeded loquats, stir to combine and cook for 5 minutes.
Add remaining ingredients to the pot and stir to combine. Place lid on pot, only covering halfway, allowing steam to escape. Simmer for 30 minutes, stirring occasionally to prevent scorching.
When sauce has thickened to desired consistency, carefully pour into the pitcher of a blender (or use an immersion blender) and blend until smooth.
Cool completely before storing in an airtight container in the refrigerator for up to 2 weeks.