Start with a background in V1 (video or still). Next put your video in V2.
In Photoshop make a graphic with a pure black (0,0,0) background. New layer; marquee tool with a 30 pixel feather, create a round or oval selection and fill with pure white (255,255,255). Export as .gif and put in V3 of Premiere.
Apply the Track Matte effect to V2, targeting V3 as the source and Luma as the key type. Might need to select “reverse” in the effect controls.