Place the minced shallots into a small mesh strainer and rinse briefly under cold running water; drain well.

In a mixing bowl, combine the drained shallots, sherry vinegar, and warm water. Let this mixture steep for two minutes.

Slowly drizzle in the olive oil while whisking constantly to emulsify the dressing into a cohesive, creamy consistency.

Taste and adjust seasoning if necessary. Store in an airtight container in the refrigerator for up to one week.