The nine-time World Rally Champion went off the road 12 kilometres into the 327-stage between Bisha and Al Henakiyah. After a nasty bounce his Dacia performed several impressive rolls, which seriously damaged the vehicle.
The 50-year-old Frenchman and his Belgian co-driver Fabian Lurquin set off again after a five-minute stop for repairs, but struggled throughout the rest of the stage.
Loeb, who has finished second three times in the Dakar Rally, ended the stage in 4 hours 20 minutes 12 seconds, more than an hour behind the day's winner, 19-year-old South African Saood Variawa.
"We were able to continue but suddenly the steering rod broke, I think because of the rollover," said Loeb at the finish.
"Then we had a problem with the engine overheating. We tried to finish the stage. We managed to do so, but we lost an hour.
"It wasn't the kind of day we prefer. We lost an hour and we got the feeling that we were in 'it' up to our necks. But it is what it is, we just have to continue. We'll keep on racing and we'll see, even if winning the rally is starting to look complicated."
Variawa, in a Toyota, finished 33 seconds ahead of Frenchman Guerlain Chicherit in a Mini.
Another South African Toyota driver, Henk Lategan retained the overall lead after finishing 12th on the day, 7mins 31sec behind Variawa.
Variawa is 41st, 7 hours 47 minutes 11 seconds behind after losing eight hours the day before following a head-on collision with team-mate and compatriot Giniel de Villiers.
Loeb sits 16th, almost an hour and a quarter off first. He also lost 30 minutes on Sunday when a fan problem caused his engine to overheat.
Reigning champion Carlos Sainz had retired on Monday after his Ford Raptor flipped, damaging its roll bar.
With rain forecast, the stage was shortened from the original 496 km.
In the motorbike competition, Spaniard Lorenzo Santolino, riding a Sherco and making his seventh appearance in the Dakar Rally, won a stage for the first time.
Australian Daniel Sanders still leads the overall standings.
The Rally through Saudi Arabia ends on January 17 in the Empty Quarter desert.
