The former Aston Villa boss is has rued a lack of goalscorers for their current predicament, and believes the team have to turn it around quickly if they are to avoid the drop
After losing to 2-1 to QPR at the weekend while Aston Villa defeated Reading, the Black Cats find themselves six points from the relegation zone with just nine games to play.
And O'Neill believes his team have not done enough to secure maximum points in games they have controlled, and believes that the remaining matches will be very tough.
"I'm not surprised at all [at the prospect of fighting for survival]," O'Neill told reporters. "I knew right from the off it was going to be very, very tough and it’s been like that all season, every game we play.
"In the last number of games we've played my own view is we shouldn't have been beaten in these games.
"We put severe pressure on Arsenal, couldn't get the ball over the line, at West Bromwich Albion I thought any piece of luck going was going with the home team.
"But you can say that forever and a day, we have to turn it [around]."
O'Neill also believes an injury crisis at an unfortunate point in the season has limited his ability to change games with substitutions, and cited the QPR defeat as a case in point.
"We had a lot of defenders on the bench but at the moment that’s all we have,” he added. "[Lee] Cattermole is injured, [Wes] Brown's been out all season so we can discount that.
"The only other one we had is James McClean, who was ill. He got let out of hospital around about 11 o’clock on Saturday morning having spent the last two days on a drip.
"We had a lot of defenders on the bench but that wasn't anything planned, that was just lack of choice."