At 03.52 hours on 11 July 1942 the unescorted Stanvac Palembang (Master Reider Oftedahl) was hit by a torpedo from U-203 about 15 miles off Tobago Island. The torpedo struck on the starboard quarter in the engine room, stopping the engines. The most of the 43 crew members abandoned ship in two lifeboats while the master, a few crew members and all seven armed guards remained on board. The U-boat surfaced, questioned the survivors and at 04.09 hours fired a coup de grâce, which hit on the port quarter, wrecking the stern gun and killing three armed guards and two crew members. The master and three armed guards then abandoned ship in a third lifeboat, while a badly injured armed guard had to jump overboard and was picked up by the boat. The U-boat fired 36 rounds from the deck gun into the tanker and finally sank her with a second coup de grâce at 06.09 hours.

The survivors in three lifeboats were picked up by the American submarine chaser USS PC-8 the next day and landed at Port of Spain. 44 men boarded the Robert E. Lee to be repatriated to New Orleans, but the ship was sunk by U-166 (Kuhlmann) near the entrance to the Mississippi. One crew member from Stanvac Palembang was lost, while the others were rescued and landed in Venice, Louisiana.