At 4.41 PM, U-65 sinks British tanker British Premier carrying 8000 tons of crude oil (31 crew & 1 gunner killed) 50 miles off Sierra Leone. 9 survivors in 1 lifeboat are picked up by cruiser HMS Hawkins on Jan 3 1941. 4 survivors are rescued by destroyer HMS Faulknor on Feb 3 1941, after 41 days in an open boat (25 days without food).
German 1st Motor Torpedo Boat Squadron attacks a British convoy in the North Sea off Aldeburgh, England, and S-28 sinks British minesweeping trawler HMT Pelton (20 killed). Destroyer HMS Verdun reports sinking one of the S-boats.
Greek submarine Papanicolis sinks Italian steamer Firenze in the Southern Adriatic Sea between the heel of Italy and Albania.
Late in the afternoon 700 miles West of Cape Finisterre, Spain, German cruiser Admiral Hipper spots convoy WS.5 (19 troopships and freighters carrying 40,000 troops and 150,000 tons of supplies including several squadrons of fighters to reinforce General Wavell in the Middle East, escorted by aircraft carriers HMS Argus & Furious and cruisers HMS Berwick, Bonaventure & Dunedin plus 4 corvettes). Hipper’s captain Admiral Wilhelm Meisel mistakes this for a regular merchant convoy and maintains radar contact overnight to attack in the morning.