I've been making chile oil for many years. I use a small heavy skillet and put in it a 1/2" thick layer of crushed dry chiles and seeds. I cover the chile with about 1 1/2" layer of canola oil. Turning the stove to medium heat I simmer the chiles in the oil for about 20 minutes. I prefer the flavor if the chiles aren't burned; some people, however, like them burned. Pour the oil through a fine strainer into a clean lidded jar. Cool and then refrigerate. The oil will be clear and red and the flavor delicious. I usually use our dried chile pequin (they're about 2" in length and flavorful as well as hot.)