Add olive oil to a large pot over low-medium heat. Add the garlic, onion, and mushrooms. Slowly cook over low-medium heat until soft and translucent, about 10 minutes.
Add 1 cup of ground walnuts (walnuts blended in a food processor or blender) and stir until combined. Add the tomato sauce, salt, pepper, chili powder, red pepper flakes, and oregano. Simmer over low-medium heat until the sauce is hot, about 10 minutes.
Add fresh basil or spinach before serving if desired.