Losing New Orleans meant a loss of one of the largest ports in the Confederacy. It meant that getting supplies to Confederate forces from European sources was that much more difficult. It also closed the mouth of the Mississippi River, and following the capture of Vicksburg, it cut the South in two.
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New Orleans, a prime target of the Union for its ports, was captured without taking the fight to the city itself. Attacks on Ports Jackson and St. Phillip, allowed General Farragut to take control of the City of New Orleans.
By the Union capturing Vicksburg and Port Hudson they took complete control over Mississippi river.
It closed one of the blockade-runners' favourite ports, and started the process of Union liberation of the Mississippi.
The Confederacy won five out of the twelve battles in the Civil War. The first victory was on April 12, 1861. It was the fall of Fort Sumter, in South Carolina.
Vicksburg was the only channel, at the time the only channel connecting the parts of the confederacy divided by the Mississippi. So long as it was held by the enemy, the free navigation of the river was prevented. Hence its importance. Points of the river between Vicksburg and Port Hudson were held as dependencies; but their fall was sure to follow the capture of the former place.