While Mattias Ekstrom won the 458km eighth stage from Al Duwadimi to Ha'il in an Audi one-two with Stephane Peterhansel, teammate Sainz finished fourth in the car category to go nearly 25 minutes clear.
The father of the Ferrari Formula One driver and namesake had seen his lead trimmed by Loeb to 19 minutes on Sunday.
"I think there’s still a long way for me and there are long stages to come," said the Spaniard.
"You can see how easy it is to lose five or 10 minutes on this race. It’s so easy, due to navigation, punctures, everything. It’s very stressful."
Loeb, driving a Prodrive Hunter for the Bahrain Raid Xtreme team, was 10th fastest after a navigation error added five km to his route.
"It was a difficult day today. We had a good stage. I was really pushing hard all through the stage, but we made a mistake with the navigation and lost around 10 minutes," said Loeb.
This year's event has turned into a duel between Sainz and Loeb, a nine times world rally champion who has yet to win the Dakar, with Qatar's reigning champion Nasser Al-Attiyah out of contention along with Ekstrom and Peterhansel.
The rally finishes in Yanbu on Friday.
In the motorcycle category, overshadowed by the death of Spanish competitor Carles Falcon after a crash a week ago, American Honda rider Ricky Brabec increased his lead over Botswana's Ross Branch to 42 seconds.
The leading pair had been separated by just a second on Sunday night.
Argentine brothers Kevin and Luciano Benavides finished first and second in the stage.
