During the American Civil War, the Union implemented the Anaconda Plan under General Winfield Scott, aimed at suffocating the Southern economy to force a Confederate surrender.^[20] Central to this strategy, initiated in April 1861 by President Abraham Lincoln, was a blockade of all Southern ports, which severely restricted the Confederacy's ability to trade, particularly in cotton—its economic backbone.^[21]

The blockade dramatically reduced the South's capacity to export cotton, with exports plummeting to less than 10% of pre-war levels. Major ports like New Orleans, Mobile, and Charleston were particularly affected. By June 1861, Union warships were deployed off key Southern ports, and the fleet expanded to nearly 300 ships by the following year.^[22] This blockade was critical in isolating the Confederacy and hindering its war effort. The Confederacy subsequently looked to foreign sources for their enormous military needs and sought out financiers and companies like S. Isaac, Campbell & Company and the London Armoury Company in Britain, who acted as purchasing agents for the Confederacy, connecting them with Britain's many arms manufactures, and ultimately becoming the Confederacy's main source of arms.^[23]

To counter the blockade, the Confederacy relied on blockade runners, small, fast ships designed to evade Union naval forces. These vessels were primarily constructed in Britain and operated routes through Bermuda, Cuba, and the Bahamas, trading imported arms and supplies for cotton. Many of the ships were lightweight and designed for speed and could only carry a relatively small amount of cotton back to England.^[24] Despite some success, many of these ships were captured by the Union, with their cargoes sold as prizes of war. When the Union Navy seized a blockade runner, the ship and cargo were condemned as a prize of war and sold, with the proceeds given to the Navy sailors; the captured crewmen were mostly British, and they were released.^[25]

The Southern economy was near collapse during the war, exacerbated by the blockade which curtailed imports of critical goods and crippled the coastal trade. Although blockade runners did manage to import vital supplies, including 400,000 rifles, the blockade's overall effectiveness was significant, contributing heavily to the economic strangulation of the Confederacy. The blockade not only cut off essential supplies but also led to widespread shortages and economic disarray within the Confederate states.

Additionally, the war period saw significant changes in global commodities, notably the rise of oil. The decline of the whale oil industry, accelerated by the war and Confederate disruptions of Union whaling, led to increased reliance on kerosene and other oil products. This shift marked the beginning of oil's prominence as a major commodity.

The strategic blockade, therefore, played a pivotal role in undermining the Confederate war effort, leading to significant economic hardship and contributing to the eventual Union victory. After the war, the impact of these strategies continued to resonate, shaping economic and diplomatic relations, as evidenced by Britain's compensation to the United States for damages caused by raiders outfitted in British ports.