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I have a SharePoint site (O365) that I want to give access to a third party (they are going to be doing some reports for us).

Ideally, I only want them to be able to work in the browser ie not be able to sync/download files, upload, however, should be allowed. Am I / How, am I able to do this in SharePoint online?

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you are requesting a lot of contradictory things, by logic someone able to upload a file should be able to see said file in the client application.

I suggest you to give contribute access to a specific standalone site collection where if you want to prevent misuse, you can set up alerts on yourself and/or the site owner to check if someone deliberately or by mistake deletes a file.

Preventing a user from syncing with onedrive synch tool is achieved by changing the setting of the library (library settings - advanced settings - "Allow items from this document library to be downloaded to offline clients?" set on no)

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