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Sweden to tighten gun laws after mass shooting at school
(www.reuters.com)
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It might be part of their guidelines to only use the English alphabet for the location at the start of the article
But "Oerebro" would still work...
Maybe, but it seems like many just drop the umlaut (or whatever it's called in Swedish) rather than trying to mimic the sound: here's a BBC article that did the same as Reuters and here's TripAdvisor also calling it Orebro
Sure but it's harder to read and understand for most people, including me. The only time I remember seeing it is when my last gets mangled on documents when travelling by air.
Example style guides, cited by the Wikipedia.