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Make sure all the oysters are clean by running them under cold water. Bring the vermouth and water to a boil and add some oysters in a single layer. Cover and steam until they are open, which should take between a minute and 3 minutes. Move opened oysters to a bowl or baking sheet and add more fresh ones until you've steamed them all open.
Strain the cooking liquid through a paper towel or cheesecloth (to remove all the debris) into a bowl. Set aside.
Use a small, sharp knife to remove the oysters from the shells, trying your best to get the little "scallop" muscle that holds the oyster in its shell -- it's tasty! When it's done, drop each oyster into the strained broth. Make sure all the oysters soak for at least 20 minutes.
Fire up the smoker. I use alder or cherry wood, and I like the temperature to be around 145°F. Keep in mind oysters are small, so you will need a fine grate to prevent them from falling through. I use dehydrator mats. Smoke the oysters for 90 minutes to 2 hours -- you don't need a whole lot of time here, just enough to get a smoky flavor without overcooking them. Don't let the smoker get too hot!
When they are done, toss the oysters in the oil and eat, or store in a glass jar in the fridge for up to a week. Freeze what you don't eat.