Melt the oil & butter in a large pot on medium-high heat. Sauté the onion for about 5-7 minutes, or until it's lightly browned.
Stir in the garlic until fragrant (about 30 seconds).
Add the crushed tomatoes, vegetable broth, water, Italian seasoning, and gnocchi. Increase the heat to high and bring the soup to a gentle boil. Cover with the lid slightly ajar and reduce the heat to medium-low. Let it simmer for 10 minutes.
Add the cream and salt & pepper, to taste, increase the heat to medium, and cook it for an additional 10-15 minutes (lid off). The broth will continue to thicken up a bit from the cream and the starch that the gnocchi releases.