If you want to make spiced oil as an experiment here is my tuppence worth:
1) Don't add any water, just use oil and curry veg and spices e.g. onions, peppers, garlic and spices. Don't add tomatoes.
2) If you use a large amount of chopped onions and keep it on a rolling gentle boil the oil won't go above about 105 degrees (due to water in onions/veg). I tried this myself with 2 litres of oil and after about 1 hour it was time to stop as the onions had lost most of their moisture. The spices did not burn as the oil temp was controlled by the veg water content evaporating.
3) I simply used a strainer to remove the onions/peppers etc. Some cooked spices (grits) sunk to the bottom of the pan but the spiced oil was coloured and clear.
I found the oil was fine for a week in the fridge and I used to freeze it and defrost before use for the oil I had stored.
The oil didn't go rancid but it was a reasonable quality oil. (rice bran)
I would suggest looking at the spice content of onion bhajis and maybe basing it on that.
The big problem is deciding what spices and how much to add. If we could get this right we would have a good spiced oil recipe.
Cheers,
Paul