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Uploading an encrypted volume to an image needs work upstream to be supported correctly: https://bugs.launchpad.net/cinder/+bug/1485449
To clarify: uploading an encrypted volume to an image is not currently supported. It can be attempted, but it results in an image that is not usable because it does not have any metadata indicating how to decrypt the image.
The RFE was verified The verification environment included the following cinder packages puppet-cinder-11.3.0-0.20170805095005.74836f2.el7ost.noarch openstack-cinder-11.0.0-0.20170807225447.7ec31dc.el7ost.noarch python-cinderclient-3.1.0-0.20170802135939.99bb6f3.el7ost.noarch python-cinder-11.0.0-0.20170807225447.7ec31dc.el7ost.noarch The tests performed according to Polarion test plan RHELOSP-25493
Since the problem described in this bug report should be resolved in a recent advisory, it has been closed with a resolution of ERRATA. For information on the advisory, and where to find the updated files, follow the link below. If the solution does not work for you, open a new bug report. https://access.redhat.com/errata/RHEA-2017:3462