At 12.50 hours on 23 August 1940 the unescorted Severn Leigh (Master Robert George Hammett), dispersed from convoy OA-200 on 20 August, was hit in the bow by one torpedo from U-37 south of Iceland. The ship had been spotted at 11.45 hours the day before and missed with a first torpedo at 18.22 hours. During the chase, the Keret was sighted and sunk before the U-boat again located the ship at 08.15 hours on 23 August.

When the crew abandoned ship in four lifeboats, Oehrn observed how the stern gun was manned and they heard how the radio operator sent distress signals, so he decided to surface and to silence the radio with the deck gun and to accelerate the sinking with shots into the waterline. Unfortunately two of the lifeboats were still alongside of the ship when the U-boat opened fire and were hit by shrapnel from the shells that exploded on the hull and killed almost all occupants. 32 crew members and one gunner were lost. The master and nine crew members made landfall at Leverburgh, Harris on 5 September.