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Heat oil in a large Dutch oven over medium-high until shimmering, about 3 minutes. Add peppers, chiles, garlic, thyme, 2 tsp. salt, and 1 tsp. sugar and cook, stirring occasionally, until peppers begin to soften and are golden brown in some spots, 10–15 minutes. Reduce heat to medium-low and add ½ cup vinegar. Partially cover pot and cook, stirring every 5–10 minutes, until peppers are very soft, jammy, and browning in some spots, 35–45 minutes longer. Remove from heat. Pluck out and discard any shriveled thyme stems.
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