Heat oil in a medium saucepan over medium heat. Add onion and garlic. Cook, stirring frequently, 3 to 5 minutes, until tender. Add small amounts of water if necessary, (about a tablespoon at a time) to prevent sticking.
Place flour in a small bowl. Gradually add 1/2 cup water to the flour (reserve remainder of water), stirring briskly to avoid lumps. Add flour mixture and remaining ingredients except for cooked shrimp to saucepan. Mix well.
Bring mixture to a boil while stirring continuously; reduce heat to medium-low, cover and simmer for 25 minutes, stirring occasionally. After 25 minutes remove and discard bay leaves.
Add shrimp and simmer 5 minutes more. Serve with chunks of crusty bread and a crisp salad.