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Heat the oil in a medium-sized, preferably non-stick saucepan with a lid, over a medium heat. Add the onions and cook for around 8 mins, until softened, then add the vermicelli and turn to coat in the oil. Tip in the butter and stir until melted. At this point you want the butter to help toast the vermicelli to a lovely even brown colour without burning the butter or the vermicelli.
Once the vermicelli is browned (not just golden) add the rice, some salt and pepper, and mix well together until evenly combined. Pour over 800ml cold water, cover with a lid and cook on a medium heat (low if using gas) and cook for 30 mins, until the rice on top is cooked. Fluff up with a fork and serve. It's desirable to have 'tahdig', which is Persian for a crunchy rice crust that you can serve in pieces atop the rice.