Toasted, ground Chinese Chili peppers are used to make Chili Oil. You can get the dried chilies, toast them to release the oils, grind them with a mortar and pestle, and then combine with hot oil. Or you can start with an all natural mix of toasted Chinese chili powder. This saves a little time and avoids the coughing that comes from breathing the fumes of roasting chili peppers in your kitchen. The Mala Market’s Chili Powder (Xiang La La Jiao Mian) has a balanced mix of fragrance (er jing tiao chili peppers are used for this) and heat (chao tian jiao and xiao mi la peppers are used for spiciness).
Chinese Chili Oil is a bit like apple pie or homemade jams and jellies: everyone’s mother has a secret recipe. Jams all include fruit, sugar, and pectin. Chili oils all share oil, heat, and toasted, ground, chili peppers.

Two approaches to making chili oil from Chinese chili powder
There are two classes of chili oil made from Chinese ground chilies: 辣椒油 (làjiāoyóu) and 红油 (Hóng yóu). 辣椒油 (làjiāoyóu), is popular with Sichuan chefs and the purist’s preference as it has just chili and oi. 红油 (Hóng yóu) means “red oil” and uses moderate heat to draw out the red color of the chili peppers. The red oil approach is often used with aromatics to flavor the oil.


Aromatic 红油 (Hóng yóu)
The Woks of Life has a delicious aromatic chili oil recipe that uses low heat to simmer the aromatics without burning them. Then the oil poured over the ground chilies to make the chili oil. I have tried this, for the garlic flavor, and it is wonderful.
Authentic Sichuan 辣椒油 (làjiāoyóu)
The Mala Market has an authentic Sichuan recipe for 辣椒油 (làjiāoyóu) using authentic caiziyou oil. This approach heats the caiziyou oil to the smoke point, then cools it before adding to the Chinese chili powder. Heating the oil like this removes the greasiness. The oil must cool before adding to the chili powder, however, or it will burn the chilies. This is done in three parts.
One third of the ground chilies are placed into a heat proof container. When the oil cools to 180 to 190 C (356 to 375 F) a third of the oil is stirred into the ground chili powder. This darkens the chili powder and brings out the smoky aroma of the toasted chilies. As the bubbling begins to dissipate, another third of ground chili powder is stirred in. Then the oil is allowed to cool to 150 C (302 F), and another third of the oil is added to the mix. The final third of the chili powder is stirred in at this stage. Finally, when the remaining oil reaches 120 C (248 F) it is mixed in, and the result is covered and allowed to rest for 24 hours.
In Sichuan, chili oil is made from one or more kinds of whole dried chilies that are first fried until crisp and then pounded in a large mortar and pestle before they are combined with hot oil. Manufactured chili oil cannot compare with homemade and these are the chili flakes for the job, as those from other regions of the world are made and act differently.
https://themalamarket.com/collections/sichuan-spices-dry-goods/products/sichuan-chili-flakes-xiang-la-jiao-mian
–The Mala Market
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