A 26 inch plus tall wheel seems a bit large on these cars.
Resulting in poor acceleration,higher ride height,
and possibly higher gearing for freeway use.
I did not like 205-65-15's on a 245,for example.

Yes it is true the speedo's read conservatively with the 165-15's.

All that said;
In the Volvo literature one of the causes
of poor fuel economy oversize tires is listed.
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71-145-S ; 72-145-E ; 72-1800-ES