In a medium glass or enamel saucepan over high heat, combine oil, peppers, garlic, onion and salt; sauté for 4 minutes. Add the water and cook for 20 minutes, stirring often. Remove from heat and allow mixture to cool to room temperature.

Transfer the mixture to a food processor or blender and purée until smooth. With the processor running, slowly add the vinegar.

Pour into a sterilized jar with a tight lid. This sauce will keep for 6 months when stored in the fridge.