Preheat the oven to 350 degrees F (175 degrees C).
Melt butter and oil in a large saucepan over medium heat. Add onion; cook and stir until lightly browned, 7 to 8 minutes. Remove from the heat.
Place rice into a 9x13-inch casserole dish. Add onion and stir until rice is thoroughly coated. Place the dish on a baking sheet.
Combine chicken stock, salt, cayenne pepper, and saffron in a saucepan. Bring to a boil, then reduce the heat to low and simmer for 5 minutes.
Pour stock mixture over rice in the baking dish and stir to combine. Spread mixture evenly along the bottom of the pan and cover tightly with heavy-duty aluminum foil.
Bake in the preheated oven for 35 minutes. Remove from the oven and allow to rest, covered, for 10 minutes. Remove the foil and fluff rice with a fork.