The 'Battle of the Caribbean Sea' was more a campaign than a single event, and refers to the naval undertaking fought between the Allies and the German and Italian navies in the Caribbean Sea as what was un effect an offshoot of the 'Battle of the Atlantic' (1941/1945).

In this campaign, German and Italian submarines attempted to disrupt the supply of oil and other materials from the Caribbean to the major Allied powers. The German and Italian boats sank shipping in the Caribbean Sea and the Gulf of Mexico, and also attacked coastal targets in the Antilles islands group. Steadily improving Allied anti-submarine warfare capability eventually drove the Axis submarines out of the Caribbean region.

The Caribbean Sea was strategically significant because of the Venezuelan oilfields and the Panama Canal in the south-western corner of the sea. The Royal Dutch Shell refinery on the Dutch-owned island of Curaçao was processing 11 million barrels per month, making it the largest oil refinery in the world; the refinery at Pointe-à-Pierre on Trinidad was the largest in the British empire; and there was another large refinery on Aruba, another Dutch-owned island. The satisfaction of the needs of the British isles required four oil tankers of petroleum daily during the early war years, and most of this came from Venezuela, through Curaçao, after Italy had blocked passage through the Mediterranean Sea from the Middle East.

The Caribbean Sea held additional strategic significance to the USA, for this nation’s coast on the Gulf of Mexico, which included petroleum facilities and Mississippi river trade, could be defended at two points. The USA was well positioned to defend the Straits of Florida but was less able to prevent access from the Caribbean through the Yucatán Channel. Bauxite was the preferred ore for aluminum, and one of the few strategic raw materials not available within the continental USA, US military aircraft production depended upon bauxite imported from the Guianas along shipping routes paralleling the Lesser Antilles group of islands. The USA defended the Panama Canal with 189 bombers and 202 fighters, and based submarines at Colón in Panama and at the submarine base at Crown Bay, St Thomas in the US Virgin Islands. Consolidated PBY twin-engined flying boats of the US Navy’s VP-51 squadron started to fly neutrality patrols along the Lesser Antilles island group from San Juan on Puerto Rico on 13 September 1939; and facilities were upgraded at Guantanamo Bay naval base and at the naval air station at Key West in southern Florida.

The UK based Nos 749, 750, 752 and 793 Squadrons of the Fleet Air Arm at Piarco International Airport on Trinidad, and British troops occupied Aruba, Curaçao and Bonaire soon after the Netherlands had been captured by Germany in May 1940. In Vichy French hands, the island of Martinique was perceived as a possible base for German and Italian ships as British relationships with Vichy France deteriorated from June 1940 after the fall of France. The 'Destroyers For Bases' agreement of September 1940 between the USA and UK made it possible for the USA to build airfields in British Guiana, and on the islands of Great Exuma, Trinidad, Antigua and St Lucia. On 11 February 1942, US forces replaced British forces on the Dutch refinery islands and began operating Douglas A-20 Havoc twin-engined attack bombers from Hato Field on Curaçao and Dakota Field on Aruba.

The first German offensive against the Caribbean refineries was 'Neuland' organised under the command of Kapitänleutnant Werner Hartenstein aboard U-156 with U-502, U-67, U-129 and U-161. The first three boats launched simultaneous attacks on 16 February 1942. U-502 sank the crude oil tankers Monagas, Tia Juana and San Nicholas between Lake Maracaibo and Aruba. U-67 entered Willemstad harbour on Curaçao and torpedoed three oil tankers: the four torpedoes from the bow tubes failed to detonate, but the torpedoes from the stern tube sank Rafaela. U-156 entered San Nicolas harbour on Aruba and torpedoed the tankers Pedernales, Oranjestad and Arkansas before the boat attempted to shell the Aruba refinery with its 105-mm (4.13-in) deck gun, which was destroyed when the first shell exploded inside the barrel as the gun crew had failed to remove the tampion. The Germans slightly damaged a large storage tank. A Venezuelan gunboat, General Urdaneta, assisted in rescuing the crews of several torpedoed vessels, and A-20 bombers attacked all three U-boats but achieved no success. As result, an increased US occupation of the island began for its protection.

U-161 entered Trinidad’s Gulf of Paria on 18 February to torpedo Mokihama and the oil tanker British Consul.

As the U-boats settled into routine patrolling, U-67 torpedoed the oil tankers J. N. Pew and Penelope; U-502 torpedoed the oil tankers Kongsgaard, Thallia and Sun; U-156 torpedoed Delplata and the oil tanker La Carriere; U-161 torpedoed Lihue and the oil tankers Circle Shell, Uniwaleco and Esso Bolivar; and U-129 torpedoed George L. Torrain, West Zeda, Lennox, Bayou, Mary, Steel Age and the oil tanker Nordvangen. The crew of U-156 used hacksaws to sever the damaged forward portion of the gun barrel and, when their boat ran out of torpedoes, used this sawn-down deck gun to sink Macgregor and the oil tanker Oregon. On 10 March, U-161 entered Castries harbour on St Lucia to torpedo the Canadian liber Lady Nelson and Umtata. After leaving St Lucia, U-161 torpedoed Sarniadoc and sank the US Coast Guard lighthouse tender Acacia with gunfire.

Five Italian submarines patrolled the Atlantic side of the Lesser Antilles islands group during 'Neuland'. Morosini torpedoed Stangarth and the oil tankers Oscilla and Peder Bogen. Enrico Tazzoli torpedoed Cygnet and the oil tanker Athelqueen. Giuseppe Finzi torpedoed Skane and the oil tankers Melpomene and Charles Racine. Leonardo da Vinci torpedoed Everasma and the neutral Brazilian Cabadelo. Luigi Torelli torpedoed Scottish Star and the oil tanker Esso Copenhagen. U-126 was simultaneously patrolling the Windward Passage between Cuba and Hispaniola, where its torpedoed Gunny, Barbara, Cardona, Texan, Olga, Colabee and the oil tankers Hanseat and Halo between 2 March and 13 March. U-504 moved to the south from Florida.

A U-boat shelled the Puerto Rican island of Mona, some 40 miles (65 km) to the west of the mainland of Puerto Rico, on 3 March, but no damage or casualties resulted.

An oil refinery on Curaçao was shelled on 19 April by U-130 under Korvettenkapitän Ernst Kals. The small engagement ended in German failure. Kals ordered the shelling of several petroleum storage tanks but after only five shots, a Dutch shore battery responded and persuaded Kais to abort his attack. Later a U-boat attacked a merchant ship off Curaçao and was engaged by Dutch anti-aircraft and naval gun batteries, but again the U-boat escaped harm.

German submarines sank two Dominican merchant marine ships in May 1942 after the Dominican Republic entered World War II on the side of the Allies.

The 3,860-ton Norlantic was a US-flagged cargo ship which was sunk on the morning of 13 May in the Caribbean by a U-boat. She was transporting assorted cargo from Pensacola in Florida to Venezuela when attacked by U-69 some 90 miles (140 km) to the east of Bonaire. At 03.38, U-69 under the command of Kapitänleutnant Ulrich Graf fired two torpedoes from a surfaced position: both torpedoes missed, so Graf ordered his crew to close the range to 2,200 yards (2000 m) and to open fire with the deck gun at 03.47. U-69 began shelling Norlantic as she attempted to flee the scene. After several hits the S vessel signalled the U-boat to cease fire so that her crew could escape the inferno in their life rafts. The Germans failed to hold their fire while two lifeboats were lowered, then at 04.11 fired a coup-de-grâce which hit Norlantic's boiler room. The ship sank, taking six men down with her; two men had been killed by the torpedo detonation and four others by the shelling. Norlantic's surviving crew were then adrift at sea for several days before being rescued by Allied ships.

U-boats sank two Mexican tankers: Potrero del Llano succumbed on 14 May to Kapitänleutnant Reinhard Suhren’s U-564 off Florida, and Faja de Oro fell victim on 21 May to Kapitänleutnant Hermann Rasch’s U-106 off Key West. Some 16 men died in the two attacks, and these sinkings prompted Mexico to declare war on Germany on 22 May.

Sylvan Arrow was a tanker of the Standard Oil and Transportation Company and was torpedoed by U-155. The attack occurred on 20 May just to the south-west of Grenada in the Caribbean Sea. Attempts to tow the damaged ship to port failed, and the ship sank on 28 May.

The tanker Hagan was sunk by U-157 on 11 June about 5 miles (8 km) to the north of the Cuban coast. Carrying thousands of barrels of molasses, the US ship was hit in the engine room. The engines were destroyed, and the torpedo also caused a boiler to explode just a moment before another torpedo hit the ship. Six men were killed, and 38 survivors made it to shore. Two days later, U-157 was sunk by a US Coast Guard cutter.

U-171 attacked the Mexican tanker Amatlan on 4 September. The tanker evaded three twin-torpedo attacks before being hit by one in a final spread. Amatlan sank with 10 men, but 24 others survived.

On 11 September, U-514 under Kapitänleutnant Hans-Jürgen Auffermann torpedoed the armed Canadian ship ]e]Cornwallis off Bridgetown, Barbados. The ship sank in shallow water after a short exchange, but was raised and towed to Trinidad in December 1942 before later being towed to Mobile, Alabama, at which she arrived on 24 January 1943. The ship was repaired and returned to service in August 1943, but was torpedoed a second time, this time by U-1230 on 3 December 1944 in the Gulf of Maine, and sank.

On 5 July 1943, some 70 miles (110 km) to the west of Port-Salut, Haiti, U-759 encountered the US-flagged Maltran, which was part of the GTMO.134 convoy. U-759 fired torpedoes and at least one hit the vessel, which sank within 15 minutes. All of her crew survived to escape in lifeboats. The crew was later rescued by the US submarine chaser SC-1279. On 7 July, U-759 torpedoed the Dutch ship Poelau Roebiah, which was part of the TAG.70 convoy. The ship sank just to the east of Jamaica, taking down two men, but 68 others were rescued. After sinking Poelau Roebiah, U-759 was chased down and attacked by the US Navy on the following day. A Martin PBM Mariner twin-engined flying boat first dropped a load of explosives over the boat, and then for seven hours US surface vessels depth charged the area, but U-759 escaped without damage or loss of life.

U-157 was sunk on 13 June 1942 by the US Coast Guard. The boat was cruising on the surface just to the south-west of Key West when it was sighted by the US coast Guard cutter Thetis. The boat dived and attempted to flee, but Thetis gained sonar contact and began a depth charge attack. After several minutes, the action ended when debris and oil were spotted by the Coast Guard crew, and thus Thetis had sunk U-157.

Seven days after escaping attacking Allied ships off Haiti on 8 July 1943, U-759 was reported sunk, although post-war research established that it was not until an attack on 23 July that the boat was actually destroyed when a PBM Mariner attacked and sank the boat.

Off Bermuda on 30 June 1942, U-158 was sunk by another PBM Mariner. Commanded by Kapitänleutnant Kptlt. Erwin Rostin, the boat took a direct hit on the deck from a depth charge, which did not detonate on impact but merely lodged itself into the teak deck planking. However, as the boat submerged, the charge detonated after the U-boat carried it down to its pre-set trigger depth.

The freighter Robert E. Lee was under escort by the US patrol chaser PC-566, some 45 miles (72 km) to the south of the Mississippi river delta on 30 July 1942, when she was struck by a torpedo. PC-566 located the attacking U-166, launched depth charges and sank the boat, though it was not until after the war that the sinking was confirmed.

On 28 August, U-94 was in operation against the TAW.15 convoy off Haiti when the boat itself came under attack by US and Canadian escorts. First, a PBY flying boat of the US Navy swooped down and bombed the boat, and then the Canadian corvettes Halifax and Snowberry attacked. Another Canadian corvette, Oakville fired depth charges which forced the submarine to the surface. The corvette then rammed U-94 twice before it slowed to a stop. An 11-man party from Oakville boarded to capture the boat and entered through the conning tower. Only two Canadians actually went through the hatch, and were surprised by two Germans who came running toward them. After ordering the Germans to halt, the Canadians fired and killed the attacking Germans when they failed to do so. The rest of the crew surrendered without incident. After barely capturing the vessel, the Canadians realised that the Germans had already begun to scuttle the boat, which was taking on water. The Canadians left U-94, which went down with 19 of her crew; Oakville rescued 26 men including the commander, Oberleutnant Otto Ites.

U-162 was detected and sunk to the north-east of Trinidad by the Royal Navy on 3 September. The British destroyers Vimy, Pathfinder and Quentin attacked U-162 with depth charges, killed two Germans and sank the boat, but 49 other Germans survived to be taken prisoner and subsequently incarcerated in the USA. The crew was interrogated and provided valuable information about U-boats and their base at Lorient on the western coast of France. The German captain, Kapitänleutnant Jürgen Wattenberg, escaped late in 1944, but was recaptured a month or so later.

On 15 May 1943, the Cuban freighters Camaguey and Honduran Hanks were being escorted by three Cuban navy submarine chasers from Sagua La Grande to Havana. The convoy was nearing Havana when a US reconnaissance aeroplane spotted a U-boat and dropped a smoke float over U-176, and the Cuban submarine chaser CS-13, under Second Lieutenant Alférez Delgado, then located the boat on sonar. CS-13 attacked with depth charges and quickly sank the U-boat with all its crew.

The French submarine cruiser Surcouf, the largest submarine in the world at the time, was rammed and sunk by the freighter Thomas Lykes off the Caribbean end of the Panama Canal on 18 February 1942. There were no survivors.

Armed with a single gun, the Liberty ship George Calvert was steaming off the eastern end of Cuba when sunk by U-753 on 20 May 1942: 10 of her crew were killed when three torpedoes slammed into the ship, which sank within just a few minutes. The surviving crewmen were captured by the Germans and interrogated before being freed in lifeboats. Three armed guards were killed and the survivors made it to the Cuban shore.

On 23 June, the unarmed transport vessel Major General Henry Gibbins of the US Army was steaming alone almost 400 miles (640 km) to the west of Key West when she was attacked by U-158. Two torpedoes hit the coffee laden ship on her port side over the course of 20 minutes, and she sank soon after this. All of her 47 crew and 21 US Army guards survived the encounter and were rescued one day later.

Stephen Hopkins was an armed Liberty ship, and on 27 September was returning to Surinam from Cape Town when she came under attack by the German auxiliary cruiser Stier. The US ship was ordered to stop by the Germans, but the Americans refused and opened fire with her single 4-in (101/6-mm) gun and a few machine guns. A short but violent battle then followed. Both vessels suffered casualties and by 10.00 the US she had been sunk. Stier was badly damaged and could no longer make steam, so her commander scuttled her less than two hours after defeating the US vessel.

The US gunboat Erie was escorting the TAG.20 convoy in the Caribbean between Trinidad and Guantánamo Bay when she was attacked some 10 miles (16 km) to the south of Curaçao by a U-boat in November 1942. U-163 under Korevettenkapitän Kurt-Eduard Engelmann surfaced and fired three torpedoes at Erie. The Americans spotted the submarine and the torpedoes, then took evasive action. Erie escaped two of the torpedoes but was hit by the third and badly damaged. Her crew ran the vessels aground on the nearby shore and she burned for several hours before the flames were brought under control. The Americans suffered seven killed and 11 wounded in the attack. Erie was later towed to Curaçao’s Willemstad harbour, but capsized and sank on 5 December.