A gas water heater includes a power burner, a flue tube, an exhaust plenum, and a draft hood. The flue tube includes a portion that describes at least a 360° loop. Products of combustion are forced through the flue tube under the influence of the power burner, and enter the exhaust plenum. In the exhaust plenum, the pressure of the products of combustion drops such that the products of combustion flow into the draft hood substantially entirely under the influence of natural convection. In one embodiment, the power burner fires down into the flue tube through a side wall of the water heater, the loop of the flue tube is near the bottom of the water heater, and the plenum is in the top of the water heater.