Heat the oil in a saute pan over medium heat. Add all the peppers, the garlic and shallots, and saute until softened and fragrant, 5 to 7 minutes. Then add 1/2 cup water and simmer an additional 4 to 5 minutes.
Place the cooked mixture into a blender and add the vinegars and salt. Blend until completely smooth and pureed. Adjust the seasoning and serve.