In this paper we present a stabilized finite element formulation to solve the Oseen equations as a model problem involving both convection effects and the incompressibility restriction. The need for stabilization techniques to solve this problem arises because of the restriction in the possible choices for the velocity and pressure spaces dictated by the inf–sup condition, as well as the instabilities encountered when convection is dominant. Both can be overcome by resorting from the standard Galerkin method to a stabilized formulation. The one presented here is based on the subgrid scale concept, in which unresolvable scales of the continuous solution are approximately accounted for. In particular, the approach developed herein is based on the assumption that unresolved subscales are orthogonal to the finite element space. It is shown that this formulation is stable and optimally convergent for an adequate choice of the algorithmic parameters on which the method depends.