Power transformers are significant in the power transmission and distribution network. A continuous monitoring of the transformer is crucial in ensuring a longer life spend service of the transformer. This paper focuses on the characterization of transformer oil using optical detection method at wavelengths below 1000 nm, which can be detected using Silicon photodetector. Transformer oil samples with 5 different concentrations of inhibitor content were prepared for the optical characterization from 950 nm to 970 nm. The results of the experiment show an excellent correlation between the concentration of inhibitor content in the oil and the magnitude of the peak absorbance at the 959 nm wavelength. This approach can potentially lead to the development of low cost and portable device that can measure the concentration of inhibitor of the transformer oil.