Into a medium saucepan over medium-high heat, add the oil. When the oil is hot, add the onion. Saute for 1 minute to soften.
Add rice and taco seasoning, stirring to coat. Continue cooking for an additional 1 minute, stirring frequently.
Pour 2 cups of water and bring to a boil. Reduce heat to low, cover, and simmer for 20 minutes. Do not remove the lid and do not stir the rice as it simmers.
Keeping the lid on, remove from heat and let the rice stand for 10 minutes. Do not skip this step! Letting the rice rest allows it additional time to absorb the steam and firm up a bit. When the 10 minutes is up, gently fluff the rice with a fork.
Adjust seasoning to taste, garnish with cilantro, and serve warm.