In a small blender or food processor, add oil, vinegar, sugar, ketchup, onion, paprika, salt, pepper, Worcestershire sauce, mustard, and water.
Blend on high speed for about 30 to 45 seconds until the dressing is completely smooth and emulsified. The sugar should be fully dissolved, and the onion completely pureed.
Transfer the dressing to a jar with a tight-fitting lid. Refrigerate for at least 30 minutes before serving to let the flavors meld. Shake well before each use.