Measure oil, onion, and pepper into the Instant Pot liner. Choose "sauté" and cook until onions are transparent, stirring often for about five minutes. Add remaining ingredients.
Lock lid in place. Using the "manual" setting, set the Instant Pot to cook for 25 minutes. Let rice rest for ten minutes once cooking time expires, then carefully release pressure.
Notes
Serve this Instant Pot Spanish rice alongside tacos, wrapped up in burritos, or with homemade enchiladas.