At 19.59 hours on 6 July 1943 the unescorted Hydraios (Master Georgios Livadas) was hit on port side under the bridge by one torpedo from U-198 while steaming on a zigzag course at 6 knots about 13 miles south of Ponta Zavora Lighthouse. The ship sank about 15 minutes after being struck on starboard side in the stoke hold by a coup de grâce at 20.17 hours. All 38 crew members and two gunners (the ship was armed with one Oerlikon and four machine guns) abandoned ship in two lifeboats after the first hit and began to pull towards the nearby shore in a slight swell. However, the U-boat went after them and the Germans first called the boat of the chief officer alongside, asking him about the name of the vessel, if it had British gunners aboard and why Greeks were working for the British. Shortly afterwards they took the master aboard for 10 minutes, asked him the same questions and confiscated the ship papers, his personal identification documents and a cashbox with 682 Egyptian Pounds. The survivors made landfall at Praia de Zavora the next morning.

One day before the attack, the Hydraios had already been spotted by U-178 (Dommes) northwest of Europa Island in the Mozambique Channel at 08.43 hours on 5 July 1943. The U-boat began to chase the ship, but the tracks of two G7a torpedoes fired at 19.35 hours were spotted and missed between two and ten yards ahead when the ship reduced speed to evade them. The Germans also failed to hit the ship in three separate attacks with four more torpedoes fired between 04.07 and 04.12 hours on 6 July. Dommes eventually gave up the chase as he suffered from stomach cramps and assumed that all torpedoes had been evaded due to the moonlit night and calm seas, thinking that further attacks had no reasonable chance of success. In fact, only the first one had been noticed.