The 'Action of the Strait of Otranto' was a British minor naval skirmish against the Italians in the Strait of Otranto, in the Adriatic Sea between south-eastern Italy and Italian-occupied western Albania (12 November 1940).

The action took place when a British squadron entered the Adriatic Sea in search of Italian naval targets. Although no one on the British ships knew it at the time, their squadron’s real purpose was to help draw Italian attention from the British 'MB8' operation and the 'Judgement' carrierborne air attack on the main Italian fleet base at Taranto. The Allied squadron was commanded by Rear Admiral H. D. Pridham-Whippell, second in command of Admiral Sir Andrew Cunningham’s Mediterranean Fleet, in the light cruiser Orion, and included the light cruisers [a]Ajax and Australian Sydney, and the destroyers Nubian and Mohawk.

On 12 November, an Italian convoy of four merchant ships (5,691-ton Antonio Locatelli, 4,427-ton Premuda, 4,391-ton Capo Vado and 2,429-ton Catalani) was returning from Valona on the Albania coast to the Italian mainland port of Brindisi under escort by the the World War I-era torpedo boat Fabrizi, commanded by Tenente di Vascello Giovanni Barbini, and the auxiliary cruiser Ramb III, commanded by Capitano di Fregata Francesco de Angelis. The Italian ships were steaming in darkened condition without navigational lights.

The British ships steamed to the north during the night of 11/12 November, and on reaching a notional line between Bari and Durazzo by 01.00 without incident, turned to for their run to the south. Some 20 minutes later, the British force encountered six darkened Italian ships, including what they thought were two destroyers and four merchantmen. The enemy vessels passed across their front and were making for the Italian mainland. Mohawk opened fire at 01.27, and the action became general.

In a confused nocturnal action, Sydney attacked the leading freighter at a range of 12,000 yards (11130 m) and set her on fire. In the following 23 minutes, the other three merchantmen were either sunk or damaged and left burning. Fabrizi was hit and severely damaged, and limped toward Valona with 11 dead and 17 wounded. After firing 19 salvoes from her 120-mm (4.72-in) guns, Ramb III broke off the action unscathed. The merchantmen were all sunk in the action.

The Allies suffered neither damage nor casualties, although a torpedo narrowly missed Sydney's stern at 01.40. The Italians suffered 36 dead and 42 wounded.

The Italians responded by despatching warplanes to locate the British force, but the CANT flying boats which eventually located the British ships were shot down. The Italian navy sent motor torpedo boats nassed to the north of Valona, the 7a Divisione Incrociatori with the light cruisers Muzio Attendolo, Eugenio di Savoia and Emanuele Filiberto Duca d’Aosta, together with the 15a Divisione Cacciatorpediniere, from from Brindisi, and the 8a Divisione Incrociatori with the light cruisers Luigi di Savoia Duca degli Abruzzi and Giuseppe Garibaldi, together with the 7a Divisione Cacciatorpediniere and the 8a Divisione Cacciatorpediniere, from Taranto to intercept the British force in the Strait of Otranto, but these Italian forces failed to make contact.

The day after the battle, the Italian torpedo boats Curtatone and Solferino recovered some 140 survivors.