During my searches I've seen this issue raised and closed a few times, but even using the latest build of docker-compose, this still doesn't behave the way I understand that it is expected to.

Scenario:
We're building a composed environment for our CI tests to run. We grab a database image, an api image, and a local copy of the image containing application we are trying to test (it has been built in a previous CI step, and tagged with the build hash provided by our CI environment (CIRCLE_SHA1)

docker-compose.yml

api:
  image: mycompany/api

undertest:
  image: mycompany/undertest:${CIRCLE_SHA1}

db:
  image: mycompany/db

The commands we run then are as follows:

docker-compose pull # Because we definitely want the latest db, and api for a true test.
docker-compose up # compose the environment

Actual Result:
No matter what I do, docker compose always tries to pull my CIRCLE_SHA1 tagged version from docker hub. it doesn't exist there, I never want to push it (until it passes tests and is re-tagged as :latest and/or :release

I have a unique tag CIRCLE_SHA1 which only exists inside the build environment, meaning no confusion for docker-compose when it tries to pull, and yet, it seems to try to fetch it anyway, and fail even though that exact tag exists locally.

Expected Result:
I'd expect the fact that there is no remote build tagged with CIRCLE_SHA1 to cause docker-compose to use the local copy it finds. I need to do pull, because I want everything else to be the latest.

I'd suggest that if there is confusion where image: refers to a remote repository, then perhaps we could use local: instead, to reference a local image?