Water column stratification exerts fundamental control on microbial carbon cycling in oligotrophic areas of the ocean, yet its impact on the partitioning and fate of newly fixed carbon remains insufficiently resolved. Here, we investigated carbon fluxes in the Northern Red Sea, Gulf of Aqaba from 5 cruises conducted during the stratified period. We measured ¹⁴C-based measurements of primary production partitioned into particulate (>0.7 µm; PP_POC) and dissolved (<0.7 µm; PP_DOC) fractions, bacterial production (BP), community and bacterial respiration across the euphotic zone (0–100 m). As stratification intensifies and nutrient supply from depth diminishes, depth-integrated PP_POC declined from 1.26 to 0.35 g C m^-2 d^-1 while the relative contribution of dissolved carbon pathways increases. The fraction of newly fixed carbon released as dissolved organic carbon (extracellular release; PER) increased from 2.5 % to >7 % of total PP, indicating that a larger fraction of photosynthetically fixed carbon was released into the dissolved C pool. PP_DOC (0.02–0.03 g C m^-2 d^-1) was positively correlated with BP (0.08–0.16 g C m^-2 d^-1), suggesting that recently released dissolved substrates contribute to sustaining heterotrophic microbial activity. Despite declining primary production, BR remained substantial (0.23–0.52 g C m^-2 d^-1), resulting in low to moderate bacterial growth efficiency (13–35 %) and indicating that most processed carbon was respired rather than incorporated into biomass. These findings indicate that summer stratification enhances the relative importance of dissolved carbon release and microbial recycling, thereby reducing the efficiency of carbon transfer to depth in the Gulf of Aqaba and likely other oligotrophic systems.