The Ghanaian forward left the Black Cats for UAE side Al-Ain in September on a one-year loan after joining the season before for £13 million, and his boss is sceptical as to whether he might return.
He told reporters: “The situation is, I believe it was a year-long loan for a start for which they had to pay us some money of the transfer fee which we paid in the first place, and that is still in existence.
“There was some talk between all parties in January that didn't come to anything. I wasn't party to those conversations, although I was kept informed of them, of course.
“I think it will be the end of the season before I can assess anything.
“There has to be a willingness on behalf of all parties as well; you wouldn't really want somebody who is really unwilling to come back to the football club, if that's the case.
“It's unfair of me to say that because it might not be the case, but it seems to be the message that's coming across.”
O’Neill also confessed that his summer transfer targets have not yet been decided.
“I haven't considered it and I certainly haven't had an opportunity to speak to a very important man at the football club who happens to own it,” he added.
“We will sit down, we will assess it. I think he is going to be here for the last couple of games of the season, which is encouraging.”
The Black Cats host Wolves on Saturday, the two clubs having enjoyed very different fortunes since their last meeting, a 2-1 defeat for O'Neill in his first game in charge.
“I have to say I was obviously very concerned coming in,” the Sunderland boss said of his first days.
"I got a great response from the players, a great response from the supporters and between them they got some results."
Sunderland’s defeat in an FA Cup quarter-final replay with Everton in March cost them the opportunity of a semi-final encounter at Wembley with Liverpool this weekend.
“I must admit, I look with a bit of envy at the match this weekend between Liverpool and Everton," the Northern Irishman conceded.
“I know how far we have come ourselves, so I don't know whether to be spurred by that there or to be in a state of deathliness.”