In a blender, combing the peppers, chili flakes, lemongrass, soy sauce, oyster sauce, and water and puree until smooth. Heat the canola oil in a sauté pan over medium heat and sauté the shallots and garlic for a few minutes. Add the basil and the puree. Bring to a simmer and add the cornstarch slurry. Continue cooking until the sauce is slightly thickened. Cool down and refrigerate until needed.