Set the Instant Pot to saute mode and add oil. Once it heats, add the onion and jalapeno. Saute for 4-5 minutes or until the onions begin to brown.
Cancel the saute mode and add all the remaining ingredients. Mix well and secure the IP lid.
Set the Instant Pot in Bean/Chili mode for 40 minutes. Do a natural pressure release for 10 minutes, then do a quick manual release of the remaining pressure.
Blend using an immersion blender until it reaches the desired consistency. Serve immediately or store.
Notes
Swap water for vegetable or chicken broth for added richness.
For a more traditional version, use pinto beans instead of black beans.
I like to blend the cooked beans well to get a smooth and creamy texture. You can blend less to keep it chunky if you prefer.