Hmmm....something's wrong all around here.....
Per Joe's advice, verify that the alarm you are hearing is actually an oil alarm.
Then...if it is....
First off, the oil line is supposed to be solid rubber, black, like fuel line, with a squeeze bulb near the tank.
How can you see the oil rise and drop?
Secondly, the oil line must be purged of ALL air. You are seeing it "rise and drop".
My recommendation is to get the proper replacement oil line from your BRP dealer, with squeeze bulb, install.
When installing, the last connection you should make will be to the VRO pump oil inlet. You must pump the bulb until the oil flows from the line,
and then attach it to the pump. No leaks allowed!!!
Also, I would absolutely run your gas with TCW-3 oil pre-mixed until you are absolutely sure your oiling system is working.
Get it all back together, mark the side of the tank with a Sharpie, run the boat, and verify that the oil level is dropping. Calculate how much oil you are using from the tank per the amount of gas consumed. If you run out 12 gallons of gas, the tank should drop about 1 quart, for example.
You are playing with a failure that could cost you the engine.....proceed carefully.