At 02.00 hours on 14 March 1942 the unescorted Penelope was hit on the starboard side underneath the forward mast by one of two G7a torpedoes fired by U-67 about 170 miles west of Dominica, after being hunted for three and a half hours. The bow of the tanker caught fire and the 39 crew members and ten armed guards aboard immediately abandoned ship in three lifeboats and one raft after the ship stopped. One G7e torpedo fired as coup de grâce at 02.19 hours struck the Penelope on the port side in the engine room just ahead of the funnel and caused the fire to spread over the whole ship, which sank by the stern about 15 minutes later, leaving a big burning patch of oil on the surface. One gunner was lost. The U-boat then went to a lifeboat, questioned the survivors and gave them the course to Dominica before leaving the area. In the later afternoon of 14 March, the survivors were picked up by the British steam tanker Iroquois and landed at Aruba on 16 March, but one crewman died en route and was buried at sea.