Heat olive oil and garlic in a large skillet over medium-low heat. Cook, stirring, until garlic sizzles and softens but is not browned, about 3 minutes. Add paprika and bay leaves and cook, stirring, until fragrant, about 30 seconds. Add sherry and sherry vinegar, increase heat to high, and cook until the liquid is reduced and sauce starts to emulsify, about 2 minutes. Remove from heat and stir in butter. Season to taste with salt. Let cool about 5 minutes.