Yes, peanut oil has a flash point at 440-450°F. Unfortunately, it degrades rapidly at those temperatures. Even 400°F would make it have a short pot life. It is also at least $10 a gallon. A sword depth tank for tempering would be a minimum of 36X8". That has a volume around 10 gallons.
A big issue with the idea is the weight capacity of an induction burner. My research shows the max weight is 50 pounds. You would have to make the tank on a three leg stand with the burner pressing against the bottom (springs?), not the tank sitting on it. This would also be the most stable setup to avoid tipping.
Just for fun, I did some math and other calculations:
A sword depth tank for tempering would be a minimum of 36X8". Stainless steel would be best. That would work for a 30" sword blade ( You would need 6" of empty tank above the liquid level).
That has a volume a little less than 10 gallons.
10 gallons of peanut oil weighs 75 pounds.
That size tank weighs at least 60 pounds with bottom and lid.
The tank will need good insulation, some method of agitation for even heating, temperature control, and some sort of gantry to keep it stable and non-tippable.
Tipping is a serious issue with any tall thin tank of hot flammable liquid. I figure the whole setup would be around 5 feet tall. A 5-foot tall setup would needs a base a minimum of 1 foot wider than the diameter. The height includes the base (three legs welded on the tank and channel welded between the legs on the floor would be best). I would suggest that the bass support be 3 feet wide to avoid any tipping risk.
Tank setup would run at least 150 pounds, probably 200.
Induction Burners:
An 1800W burner will handle an 8-10" wide pot base. The ones I looked at have temperature control only in 20° steps. As said in the first paragraph, the weight limit seems to be 50 pounds. Heating rate is not real fast.
I also read technical information on ambient temperature. They need a free flow of air with a max of 110°F. I suspect sitting below a 400° tank of oil will raise the ambient in that area well above 110°.
Heating time - It appears an induction burner heating a large volume of liquid isn't very fast. The charts showed an 1800W burner could heat 4 gallons of water to boiling at a rate of 2.5°/min. I don't know how much efficiency would be lost as you tried to heat 10 gallons of oil, but suspect it may be half as efficient or worse. A 4 gallon pot of water would take about an hour to heat from 70°F ambient to boiling. No telling what (if possible) it would take to heat to 400°, but at 2.5°/min that would take 6.2 hours to heat 4 gallons. 10 gallons of oil may take half a day to heat up. This would be the biggest reason tragedy could strike, as I doubt anyone would sit there staring at the readouts for 12 hours without going to do something else.
Please don't just set the burner at 400° and go do something else while waiting for it to heat up unless you don't want to have a shop anymore.
Safety:
In a tall tank of flammable liquid is never going to be "safe". The best you can do is reduce the risks. You have two choices to heat it to 400°F. As you near the flash point, safety gets somewhat doubtful no mater what you do.
