Heat olive oil in a medium saucepan over medium heat. Add the rice and stir to coat completely in oil. Cook, stirring occasionally for 2-3 minutes, until rice is lightly toasted.
Add vegetable broth, tomato sauce, diced green chilies, and taco seasoning and stir to combine.
Increase heat to high and bring the rice mixture to a rolling boil. Once boiling, reduce heat to low and cover with a lid. Cook for approximately 20 minutes, or until liquid is absorbed and rice is fully cooked.
Remove from heat and allow rice to rest for 5 minutes. Remove lid and fluff the rice mixture with a fork.