Heat the oil in a medium saucepan over medium heat. Add the onion and 1/2 teaspoon salt and cook, stirring occasionally, until soft, 6 to 8 minutes. Add the rice and cook, stirring, for 2 minutes.
Stir in the tomatoes, chilies, and 1 1/4 cups water and bring to a boil. Reduce heat to low, cover, and simmer, stirring once halfway through, until all the water is absorbed, 18 to 20 minutes. Remove from heat and let stand, covered, for 5 minutes. Fluff with a fork before serving.