This comes to us from the old diesel submarine days. When subs ran on diesels and men were covered in soot. Ok, weak joke.

Anyway, in order to conserve space the fuel was carried in tanks outside the pressure hull. When the tanks were full they were always full of liquid. When fuel was taken out of the tank sea water was drawn into the bottom of the tank. As more fuel was taken out more seawater was drawn in, thus making the sub heavier.

The amount of fuel in the tank was calculated by sounding the tank and looking for the water/fuel interface. The measurement was then cross referenced on a chart and the amount of fuel was calculated from there.

Oddly enough we did the same thing onboard my destroyer. The fuel tanks were sea water compensated as well and we would guess at how much fuel was felt on board at the end of the day using the same method.