At 00.30 hours on 29 June 1941, U-651 fired two G7e torpedoes at convoy HX-133 south of Iceland and sank the Grayburn in station #93. The U-boat was sunk by the escort vessels of convoy later that day.

The Grayburn (Master John William Sygrove) had originally been in station #73, but changed to station #93 after some ships straggled from convoy in heavy fog. She was hit on port side amidships by a torpedo, immediately settled on an even keel and sank within 5 minutes. Because the port lifeboat had been destroyed, most survivors tried to abandon ship in the starboard lifeboat which was pulled down and turned over by the suction from the sinking ship, throwing the 30 occupants into the water and drowning all but two of them. Five men managed to launch a small jolly boat and others rescued themselves on rafts or cling to debris. 16 survivors, two of them slightly injured, were picked up by HMS Violet (K 35) (Lt F.C. Reynolds, RCNVR) and HMS Northern Wave (FY 153) (T/Lt W.G. Pardoe-Matthews, RNR), later transferred to the British rescue ship Zaafaran (Master Charles Kavanagh McGowan, DSC) and landed at Gourock on 2 July. Another survivor was rescued by HMS Arabis (K 73) (LtCdr J.P. Stewart, RNR) and landed at Londonderry. The master, 26 crew members and all eight gunners (the ship was armed with one 4in, one 40mm and four machine guns) were lost.