A method for encrypting data blocks is provided. The method receives a plurality of data blocks and encrypts each data block using an LBA of the data block as a tweak. The method writes the plurality of encrypted data blocks to physical blocks of the plurality of physical disks. The method then performs deduplication on the physical disks by determining that first and second physical blocks in the physical disks are duplicates, decrypting encrypted data in the first physical block using a first LBA associated with the first physical block as the tweak, and re-encrypting decrypted data in the first physical block using a PBA associated with the first physical block as the tweak. When reading the data back, either the LBA or PBA is used as the tweak, depending on whether the data was encrypted using LBA or re-encrypted using PBA during the deduplication process.