Nine-times world rally champion Loeb beat fellow Frenchman and 14-times Dakar winner Stephane Peterhansel (57) over the dunes and rocky terrain in a 425km loop around Ha'il to win by 13 seconds.
It was the Bahrain Raid Xtreme driver's first stage victory of the 2023 event and 17th of his career, as well as the Prodrive-run team's second in a row, and he did it despite problems.
"We lost the power-steering 20km from the end, so we had to finish very slowly the stage. I couldn’t keep the car on the road. We went out one time, we had two spins, I couldn’t turn the steering wheel," said Loeb.
Four-time Dakar winner Al-Attiyah finished the stage fourth, with Audi's Carlos Sainz (60) in third.
"A long stage, it's not easy, very tough. A lot of camel grass and off-piste. It wasn’t easy. We had one flat tyre and then we tried to push," said the Qatari, who leads Saudi Arabia's Yazeed al Rajhi (41) by 18 minutes and 18 seconds.
Peterhansel, driving an electrified Audi and chasing a career 50th stage win, is third overall and 18 minutes and 52 seconds off the lead with Sainz fourth but more than half an hour behind Al-Attiyah.
Loeb remains well outside the top 10 after suffering three punctures and losing more than an hour during Monday's second stage.
Australian Daniel Sanders, riding for the GasGas team and complaining of arm pain, led the motorcycle category by three minutes and 33 seconds from American Skyler Howes (30).
Spain's Joan Barreda (39) won the stage, his 29th career success, ahead of Chile's Pablo Quintanilla.
The Hero team's Portuguese rider Joaquim Rodrigues (41) was taken to hospital with a leg injury while India's Harith Noah also fell and retired.
