I think we are talking about two different things?
The oil level sensor is located on the passenger side of the oil pan. It will light a lamp only when a low level is sensed or trouble with the wiring.
The dashboard oil pressure gage is reading the pressure sensed at the oil filter. It is not tied into any warning lamps, as someone has already stated.
If I remember correctly, a flashing Check Engine light is a warning. If it is steadily lit, then this is a more serious issue?? I will try to find out where I read that.
94 Black Laredo 4-Liter with QuadraTrac (42RE trans & NP249 TC) 200,000 + miles purchased new
88 Cherokee 2-door with 5speed manual 139K miles(deceased) purchased new