In a medium saucepan, heat the oil. Add the shallots, garlic, lemongrass, jalapeño and ginger and cook over moderate heat, stirring, until softened and browned, about 10 min.
Scrape the mixture into a blender. Add all of the remaining ingredients along with ½ C of water and process until smooth.
Scrape the peanut paste back into the saucepan and cook over low heat, stirring occasionally, about 20 min. The peanut sauce will darken.