In Estonian, Õ is the 27th letter of the alphabet (between W and Ä), and it represents a vowel characteristic of Estonian, the unrounded back vowel /ɤ/, which may be close-mid back, close back, or close-mid central.[1] The vowel was previously written with the letter Ö, but in the early 19th century, Otto Wilhelm Masing adopted the letter Õ, ending the confusion between several homographs and clearly showing how to pronounce a word.
In informal writing, e.g., emails, instant messaging and when using foreign keyboard layouts where the letter Õ is not available, some Estonians use the characters O or 6 to approximate this letter.
In most parts of the island Saaremaa, Õ is pronounced the same as Ö. (Wikipedia)