Finely dice an onion and a jalapeño.
Add oil to a pan and heat. Then add the diced onion and jalapeño and sauté until toasted and fragrant.
Add diced tomatoes to the pan and cook.
Add minced garlic and Hatch chilies.
Season with chipotle chili powder and smoked paprika. Stir well to combine.
Continue cooking the mixture until the tomatoes release their moisture.
Add water or veggie broth and allow the mixture to cook down.
Grate sharp cheddar and Oaxaca cheese. (Tip: use cold cheese for easier grating).
Add heavy cream to the pan.
Once the mixture begins to simmer, lower the heat.
Slowly add the grated cheddar and Oaxaca cheese, stirring continuously until all the cheese is completely melted and the queso is smooth.
Taste the queso and adjust for salt as needed.
(Optional) Top with extra grated cheese.
(Optional) Broil in an oven or use a kitchen torch to melt and slightly brown the top layer of cheese before serving for an extra crust.
Serve hot with tortillas or chips.