Heat a medium saucepan over medium-high heat. Add oil. Cook shallots and garlic in oil until just beginning to brown, about 1-2 minutes. Sprinkle in flour and cook another minute, stirring constantly.

Add potatoes, milk, chicken broth, salt and pepper. Cover and bring to a simmer. Simmer for 10 minutes until potatoes are tender.

Remove pan from heat and puree mixture using an immersion blender.

Stir in cheese until melted and incorporated into soup. Stir in the sour cream.

Spoon into bowls. Garnish with chives, sour cream and bacon.