That oil light is for the oil injection tank under the left rear fender. If you still have oil injection installed, and the tank is full then the sensor is bad. It's simply a normally open float switch that closes when the level gets too low and turns the light on.
If you have eliminated the oil injection and premix, then you should unplug the two wires at the back of the frame and electrical tape them to the rest of the harness. One is power off the headlight switch and the other goes to the light inside the headlight bezel.