Our V70 ´98 GLT 170HP NA suddenly increased fuel consumption + heavy increase in oil consumption. Was really worried since thes could be signs of dying, but decided to look for the simple first. Car had just before been to shop to have front O2 sensor replaced (threw a code repeatedly, 160 k miles on odo, no fuel consumption increase at that time point).
Turned out intake air preheater aluminum hose had come off from metal casing over exhaust manifold which is easily seen between engine and firewall. 3 weeks after pushing metal tubing back in place everything now seems in order. I assume increase in oil consumption was because electronics was feeding engine with a far to "rich" mix, the extra gas washing out cylinder wall oil (?). Suggest you check if you have some similar issue with intake air.
My guess is mechanic dislodged air intake hose to route cable for replacement O2 sensor, then didnt push air intake hose back on firm enough.

Good luck!

Gustaf

multiple Volvos in premorbid history; now 2xV70, 1x850